Could Bezos Buy Fox News?
July 17, 2019 8:01 PM   Subscribe

Serious but maybe stupid question. The market cap for Fox Corp. is $22bn. Rupert Murdoch is worth $22bn. Jeff Bezos is worth $165bn. If he really wanted to, for grins and giggles, could he take hostile control of Fox News?
posted by jasondigitized to Work & Money (6 answers total) 1 user marked this as a favorite
 
The present Justice Department would likely intervene as they did in the merger of AT&T and Time Warner. Whether they'd succeed is another matter, but it's not simply a question of being able to afford the sticker price.
posted by caek at 8:14 PM on July 17, 2019


It'd be hard. From light googling it looks like the Murdochs control about 40% and the company seems to have a poison pill. I didn't dig into details cause I got sick of paywalled sources, but the typical poison pill activation is something like "all shareholders who've held stock more than one year get an extra share for each share they own" which means if the Murdoch's aren't selling it's tough to imagine a path.

Personally I think the Murdochs are less ideological than people imagine, and like good capitalists would sell you the rope you'd use to hang them.

The present Justice Department would likely intervene as they did in the merger of AT&T and Time Warner. Whether they'd succeed is another matter, but it's not simply a question of being able to afford the sticker price.

Possible, but there really aren't antitrust considerations. Fox has outsize influence but hardly dominates the "news market" no matter how you want to slice it, and Bezos (even if you count the Post and Amazon Video) isn't really a direct competitor.

Might be other grounds--maybe around FCC licenses for any stations owned--but the ones I can think of are all thin.
posted by mark k at 8:29 PM on July 17, 2019 [4 favorites]


Possible, but there really aren't antitrust considerations. Fox has outsize influence but hardly dominates the "news market" no matter how you want to slice it, and Bezos (even if you count the Post and Amazon Video) isn't really a direct competitor.
I didn't say the Justice Department would win. But I don't think the merits of the case matter a ton for what the present administration's Justice Department would do in response to this particular scenario. Same goes for the FCC under Ajit Pai.
posted by caek at 8:53 PM on July 17, 2019


40% isn't technically enough to thwart a takeover if all other shareholders want to tender. (A poison pill only dilutes a potential acquiror's stock, meaning it only makes it harder to achieve a majority.) You'd need an astronomically high offer, though, and quite possibly a minority shareholder suit--there's some number, I think, at which the board would be subject to Revlon and a poison pill might be unenforceable.

(It's important to recognize generally that Bezos being "worth" $165 billion doesn't mean he has anywhere near that amount available to deploy in cash.)
posted by praemunire at 9:05 PM on July 17, 2019 [2 favorites]


This is pretty complicated and it's what investment banks M&A teams do (present pitchbooks on acquiring or divesting companies).

A few things to consider:
- Bezos $165 bn -- most of this would be in Amazon stock, and some would be in restricted Amazon stock. He could exchange some of his Amazon stock (i.e. fund the Fox acquisition through a combination of Amazon shares, cash and probably debt), but that would present complications to his control over Amazon

- Market cap of $22bn. That's just to buy out the shareholders, and not the debtholders. It's an extra $3.9bn to buy out their debtholders (taking into account that they have $2.8bn cash on their balance sheet) Depends what their capital structure is to how much power the debtholders has.

- Control premium. To acquire an entire company and have control, you would have to pay a premium for control. This could be anywhere from 20% above the current share price or much, much more.

That is just what I have on top of my head. But entire teams are put to this kinda of work.
posted by moiraine at 2:35 AM on July 18, 2019 [1 favorite]


After his divorce settlement, Bezos's net worth is more like $125 billion. Also keep in mind that buying the Washington Post, for Bezos, was $250 million, basically spare change for him. Like you or me buying a good lawnmower. Fox is a horse of a different color — counting the debt, buying 100% of it would be 20 percent of his net worth, or more, and he'd have to dump some Amazon stock to finance it. Which he isn't going to do.
posted by beagle at 11:50 AM on July 18, 2019


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