Disney's proposed deal to acquire the 21st Century Fox assets has hit a substantial speed bump this week, as one of the Fox shareholders has filed a lawsuit in regards to the merger.
According to The Hollywood Reporter, Robert Weiss filed the suit on Friday in Delaware federal court, saying that what was filed with the Securities and Exchange Commission wasn't an accurate estimation of future earning. Weiss' suit is reportedly seeking to put a stop to the transaction.
The lawsuit states that a proxy statement filed on June 28 either omits, or completely misrepresents the future financial projections and the data underlying financial valuation analyses from Goldman Sachs and Centerview Partners. Furthermore, the suit claims that the potential conflicts of interest for Goldman Sachs have not been fully disclosed.
"In short, unless remedied, 21CF's public stockholders will be forced to make a voting or appraisal decision on the Proposed Transaction without full disclosure of all material information concerning the Proposed Transaction being provided to them," Weiss says in the complaint.
Specifically, the shareholder lawsuit takes issue with the lack of projections for Hulu's future earnings, as well as the estimates for European broadcaster Sky in the years to come. Weiss also wants information about the debt and raises concerns regarding Goldman Sachs.
The suit aims to have the Fox-Disney merger enjoined on a preliminary basis, but if that doesn't occur, the shareholder would like to see the deal rescinded with an award of rescissory damages.
Disney and Comcast have been engaged in a hefty bidding war for the Fox assets, with Disney latest bid setting the standard. The overall $71.3 billion offer includes a combination of cash and stock, amounting to about $38 per share. The Justice Department has already approved the deal, with the stipulation that Fox's regional sports networks are divested. Disney has already agreed to those terms.
There's still time for Comcast to come in with another bid if the company chooses to do so. Reports suggest that this new bid would be somewhere in the range of $80 billion. This would cause Disney to either back out of the bidding war and allow Comcast to take over, or ready an even higher bid by combining cash and stock.