Disney inch closer to owning Hulu – The Motley Fool
For months, speculation has pleaded that AT & T (NYSE: T) would sell its stake in popular video streaming platform Hulu. Telecommunications and media behemoth found themselves owning 9.5% of Hulu after the acquisition of Time Warner last year, a deal that significantly increased to Ma Bell's debt burden. Other places in the media megamergers, Disney (NYSE: DIS) just completed their own acquisition of twenty-first century Fox entertainment assets, which gave it majority ownership of Hulu.
AT & T just pulled
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Image Source: Hulu
Payment of debt
AT & T and Hulu announced yesterday that they have signed an agreement for AT & T to sell their minority share back to Hulu, with the value of Hulu worth $ 15 billion, which means that AT & T received $ 1.43 billion for its 9.5% Government or third party approvals were not required and the deal was immediately terminated upon signing.
"We thank AT&T for their support and investment over the past two years and look forward to future cooperation. WarnerMedia will continue to be a valued partner in Hulu for many years as we offer our customers the best of TV, live and on demand, all in one place, says Hulu CEO Randy Freer in a statement.
T-figure for long-term debt (quarterly) of YCharts.
AT&T says it will use the proceeds to pay off debt, amounting to $ 176.5 billion at the end of 2018.
Two down, one to go
Hulu was originally created as a joint venture between Disney, Time Warner, Fox, and Comcast (NASDAQ: CMCSA) . Two of these partners have now sold their bets in one way or another, leaving only Disney and Comcast. After AT&T finishes, Disney now owns two-thirds of Hulu, with Comcast owning the remaining third. Given Hulu's current valuation, Comcast's stake is worth $ 5 billion.
Disney has made it clear that it hopes to pack its growing portfolio of OTT streaming services, ESPN + and Disney +. The House of Mouse finally announced details of Disney + last week, saying it will be priced aggressively at just $ 7 per month. Hulu recently cut the price of its most popular plan to $ 6 per month. In an interview with Bloomberg, just days after the Disney + opening, CEO Bob Iger discussed bundling and buying partners:
Hulu, we still have minority partners and everything we do with Hulu has to be done with them in mind. So bundling will be something we can take to Hulu's management and board, but it would require approval [of minority partners]. But we believe that there will be consumers who want all three and eventually we will allow a consumer to buy all three.
When I was asked to buy the whole of Hulu, Iger replied, "We'll see. Have been in talks with both parties about that opportunity, but it's still a little early to speculate." Perhaps it wasn't too early to speculate. at all.
