Disney is moving forward with their plan to buy out the remaining 33% of Hulu from Comcast. While valuation appraisals are being completed and a final valuation issued, Disney plans to pay NBCUniversal the guaranteed minimum value they agreed upon when the deal was made in 2019.
Disney said they will pay the $8.61 billion minimum by December 1, 2023. From there they will wait for a final valuation (as of September 30, 2023) to pay any difference to Comstast next year.
Here is the official press release from the Walt Disney Company:
“The Walt Disney Company (NYSE: DIS) announced today that it will acquire the 33% stake in Hulu, LLC held by Comcast Corp.’s (NASDAQ: CMCSA) NBC Universal (NBCU), following Comcast’s November 1 exercise of its right under the put/call arrangement between the two companies. The acquisition of Comcast’s stake in Hulu at fair market value will further Disney’s streaming objectives.
Under the terms of the put/call arrangement, by December 1, Disney expects it will pay NBCU approximately $8.61 billion, representing NBCU’s percentage of the $27.5 billion guaranteed floor value for Hulu that was set when the companies entered into their agreement in 2019 minus the anticipated outstanding capital call contributions payable by NBCU to Disney. Under the appraisal process agreed to by Disney and Comcast, Hulu’s equity fair value will be assessed as of September 30, 2023, and if the value is ultimately determined to be greater than the guaranteed floor value, Disney will pay NBCU its percentage of the difference between the equity fair value and the guaranteed floor value. While the timing of the appraisal process is uncertain, we anticipate it should be completed during the 2024 calendar year.”
Disney’s 2023 fiscal year-end earnings call will be on November 8, 2023. At that time, investors will get a better look at the 2023 financials, and we may hear more information about the Hulu acquisition.
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