Comcast & Disney Fail to Agree on A Price For Hulu But Ask Morgan Stanly & JPMorgan Chase To Help End The Fight





Disney and Comcast have spent the last few months going back and forth over the valuation of Hulu. Now it seems the two sides failed to reach a price that both will be happy with. This has resulted in them turning to two outside companies to help decide the price.

In an SEC filing from September, Disney disclosed that the companies will both hire outside investment banking firms to come up with a sale price if the the two companies couldn’t agree on a price. Those two firms’ valuation will be used to set the final sale price for Disney to buy Comcast’s share of Hulu. Now that has happened as Comcast hired Morgan Stanley and Disney hired JPMorgan Chase to help decide the value of Hulua, according to CNBC.

If JPMorgan Chase and Morgan Stanly assements are not within 10% of each other, the two firms will then select a third firm to come up its own figure. The ultimate sale price will come from the average of the two estimates that are closest in value to each other.

Here is how Disney says the firms will come up with a price:

The appraisers shall take into account factors they determine relevant to valuation and certain specific factors, including, among others, Hulu’s historical financial and operating results, which shall be based solely on audited financial statements; that Hulu is valued as a going concern, carrying on its existing business activities; and Hulu’s future business prospects and projected financial and operating results, assuming that the assets, contract rights and intellectual property used in Hulu’s business that are provided by Disney will be continued and available to Hulu in a manner and on terms consistent with past practice.

This comes as Disney and Comcast have agreed to move up talks to later this month to help speed up the process of Hulu’s sale. Goldman Sachs is involved with the appraisal process, which Roberts says will take time to reach a deal. Disney and Comcast amended their deal so either can force the other to accept a deal by November.

The companies set a valuation of $27.5 billion five years ago. But Comcast CEO Brain Roberts, who spoke on Wednesday at the Goldman Sachs Communacopia + Technology investor conference, said Hulu is “way more valuable” now compared to then. Comcast is hoping for as high a valuation as possible, even as Disney hopes it’ll be closer to the $27.5 billion mark.

The final details of Hulu’s sale are far from a done deal but there’s a clear path to figure out the valuation. The question now is will Comcast or Disney be happy with what the final price ends up being for Hulu

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