20th Century Fox Executive Sues To Stop Fox-Disney Merger

According to The Hollywood Reporter, an executive for 20th Century Fox has filed a lawsuit to put a stop to the sale of 21st Century Fox’s studio assets to Disney, which he claims violates securities rules. Robert Weiss, who leads other shareholders, filed a lawsuit on Friday in Delaware federal court. He claims that a proxy statement filed with the Securities and Exchange Commission on June 28, omits and misrepresents their financial projects and the information focusing on financial valuation analyses from Goldman Sachs and Centerview Partners. It said that Goldman’s potential conflicts of interest have “not been adequately disclosed.”

The complaint reads: “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.”

During their bidding war with Comcast, Disney suggested $38 per share in cash and stock for Fox’s assets, which was approved by the Justice Department with the condition (that Fox agreed to), that Fox’s regional sports networks are divested. The lawsuit from Weiss complained about that the lack of projections or forecasts from Hulu and earnings estimates for Sky. Weiss also wants more information about debut and wants to know how a Goldman affiliate could be the underwriter, placement agent and bookrunner “in connection with Fox’s possible incurrence of permanent debt financing. This is presented as a potential conflict given the investment bank’s role in issuing its fairness opinion.”

Fox and its board have been accused of securities violation. If the merger isn’t “enjoined on a preliminary basis,” Weiss wants the deal rescinded with an award of rescissory damages.