Important highlights from upcoming meetings, provided by Glass Lewis’ global research team

The Walt Disney Company & Twenty-First Century Fox, Inc.
New York Stock Exchange (DIS) & NASDAQ (FOXA) – June 27

Secular shifts in the media sector, pushed forward by expanding direct-to-consumer alternatives and a la carte consumption, have increasingly given rise to consolidation by and between content producers and distributors seeking to transition away from an “old media” model in progressive decline. Within that context, and just less than a year off AT&T’s announced intent to acquire Time Warner, industry titans Disney and Fox quietly initiated discussions around Disney snapping up the bulk of Fox’s film and television assets. Negotiations advanced in unusually surreptitious fashion before an article in the financial press triggered immediate competitive interest, most notably from Comcast. The resulting scuffle between Comcast and Disney – running parallel with Comcast’s ongoing battle with Fox for control of European media giant Sky plc – has led to a late-stage flurry of bids and counterbids and wide speculation around the ultimate outcome of a process which will reshape a substantial portion of the media landscape. Though recent moves by Comcast – most notably a more precise focus on the Sky transaction – suggest most of the tumult may have passed, the presence of highly motivated, well-capitalized bidders may yet yield further developments in advance of the scheduled vote.

GGP Inc.
New York Stock Exchange – June 26

U.S. mall owner GGP Inc. accepted a $14 billion buyout offer from its largest shareholder, Brookfield Property Partners LP, one of the largest commercial real estate companies in the world. Brookfield, which currently owns 34% of GGP, and a special committee of the GGP board negotiated a complex cash-and-stock structure for the acquisition which raises a number of considerations for GGP’s public stockholders. Those holders ultimately have the ability to approve or reject the deal through a “majority-of-the-minority” voting requirement.

Among the potential concerns is a lower acquisition price for GGP’s high-quality retail assets than many investors, analysts and even GGP insiders had expected to realize in a transaction. Other concerns stem from the equity portion of the consideration, which includes limited partnership units in Brookfield or shares in a newly created Brookfield REIT, the latter of which is meant to mimic GGP’s existing REIT shares, but neither of which will have any meaningful voting rights. In addition, the tax implications of the acquisition for GGP’s public stockholders are unclear and onerous. On the other hand, GGP has limited, if any, strategic alternatives other than a combination with Brookfield. GGP shareholders are left to weigh a potentially opportunistic offer in the context of limited options and uncertain prospects.