Disney Buys Comcast’s Hulu Stake. For How Much Is Still TBD.

Walt Disney (ticker: DIS) on Wednesday said that Comcast (CMSCA) has exercised its right to sell its one-third stake in the streaming service to Disney, which holds the other two thirds.

But this is a complicated situation, and the precise price of the transaction remains to be determined. Disney said it expects to pay Comcast $8.61 billion by December 1. Under an agreement signed by the two companies five years ago, both sides had the right to trigger a transaction in which Comcast would sell Disney its minority stake in Hulu. The agreement set a floor valuation for Hulu of $27.5 billion.

Terms of the deal call for Disney to pay Comcast one-third of the floor valuation—less a capital call contribution to Hulu—within 30 days of the exercise of the put. But that’s not the end of the story. Under an appraisal process agreed to by both sides, Hulu’s equity fair value will be assessed as of Sept. 30, 2023. And as Disney notes, if that figure is determined to be above the floor value, Disney will have to pay its share of the difference, which could mean billions of dollars more flowing from Disney to Comcast. Disney said it expects the process to be completed in 2024. headtopics.com

The process is convoluted. As disclosed by Comcast in a securities filing in September, both sides will hire bankers to estimate Hulu’s fair value. If the two estimates are within 10% of each other, fair value is calculated as the average of the two figures. If those estimates are farther apart—which seems likely—then the bankers from the two sides together pick a third banker to value the business, and then the fair value will be an average of the two estimates that are closest together.

Hulu Deal for Disney, Comcast: Stock Analyst Outline ScenariosStarting on Nov. 1, an option to begin the deal process for the 33 percent stake in the streaming platform — expected to be worth north of $9 billion — can be triggered. Read more ⮕

The Orville: Disney, Comcast Could Kick Off Hulu Moves This WeekBack in September, we reported on how Comcast & The Walt Disney Company were looking to wrap up The Mouse’s expected buyout of Comcast’s one-third stake in Hulu. Read more ⮕

Hulu: Disney in Comcast Deal to Buy Full ControlThe conglomerate has so far held a 33 percent stake in the streamer. Read more ⮕

Hulu Bought By Disney For $8.6 BillionDisney is going all in for Hulu. One day after the Mouse House and Comcast co-owned streamer went on the market, Disney is buying the remaining 33% stake in Hulu for $8.61 billion. While there will… Read more ⮕

Disney to buy remaining Hulu stake from Comcast in widely expected moveDisney said Wednesday that it had agreed to buy Comcast‘s one-third stake in streaming service Hulu, a long-expected outcome. Disney said it expects to… Read more ⮕

Disney to buy remaining 33% stake in Comcast’s Hulu stakeDisney to buy remaining 33% stake in Comcast’s Hulu stake Read more ⮕