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The 21st Century Fox logo is displayed on the side of a building in midtown Manhattan.Lucas Jackson/Reuters

Walt Disney Co. raised its bid for the bulk of Twenty-First Century Fox Inc.’s film and television assets to $71.3-billion on Wednesday, sweetening its deal with cash as it looks to upend Comcast Corp.’s $65-billion offer.

The new cash-or-stock deal may be attractive to Fox’s largest shareholder, Rupert Murdoch, who owns 17 per cent voting shares along with his family. The Murdochs face a large capital gains tax bill under Comcast’s all-cash offer. Disney’s previous offer was all stock.

Fox’s board of directors said Disney’s latest offer was “superior” to the proposal made by Comcast and would create “one of the greatest, most innovative companies in the world.”

Disney and Comcast want to bulk up their own entertainment businesses with Fox’s well-known TV shows and movie franchises, like the X-Men superheroes and The Simpsons, to better compete with fast-growing digital rivals Netflix Inc. and Inc.

Fox’s international media companies Star India and European pay TV company Sky TV Plc appeal to Disney and Comcast for overseas growth.

“These bids are a validation of Fox assets, which can be a big help to someone looking to bring their content business to a global scale,” said Drew Weitz, director of equity research at Omaha, Nebraska-based Weitz Asset Management.

The $800 million Weitz Value Fund owned 550,000 Comcast Class A shares and 450,000 Twenty-First Century Fox Class A shares at the end of March.

Disney’s revised offer of $38 a share, which would be split 50-50 in cash and stock, is $10 a share higher than Disney’s first bid in December 2017. Comcast’s last bid was for $35 a share in cash.

Disney will also take on about $13.8-billion of Fox’s net debt, implying a total transaction value of about $85.1-billion.

The latest move by Disney raises the hurdle for Comcast, which has to decide whether it is feasible to counter with a higher bid.

A Comcast representative declined to comment, but analysts and investors widely expect a counterbid from the largest U.S. cable company and owner of NBC Universal.

“Comcast has to come in with a higher bid,” said Mario Gabelli, chairman and chief executive officer of Gamco Investors which owns 10.1 million Fox shares. “They are out of the game right now!”

Disney chief executive officer Bob Iger played down any antitrust concerns in a deal, and said he has been working with regulators around the world for the past six months.

“We believe that we have a much better opportunity both in terms of approval and the timing of that approval than Comcast does in this case,” Iger said.

Quoting Bloomberg News, CNBC reported that Disney was nearing U.S. Justice Department approval on the deal. Disney declined to comment immediately on the report.

Comcast may face tougher regulatory scrutiny if the deal involves any transfer of television licenses, which would trigger an Federal Communications Commission review, said Ketan Jhaveri, a former Justice Department attorney who served on its telecommunications task force for internet policy.

AT&T structured its $85 billion deal to buy Time Warner Inc. to avoid such a review.

Fox shares jumped 8 per cent to $48.23, while Comcast rose 2.1 per cent to $33.52. Disney added 1.2 per cent to $107.43.

Sky Plc shares gained 3.1 per cent as investors hoped Fox would increase its offer since the company could afford to pay more due to the bidding war. The European pay-TV group, 39 per cent owned by Fox, is also being pursued by Comcast.

Major sports and news assets including Fox News, Fox Business Network and Fox Sports are not part of the businesses being sold and would be spun off into a separate company.

Following the deal, Fox shareholders would own about 19 per cent of the combined company, Disney chief financial officer Christine McCarthy said on a conference call.

Disney no longer expects to complete the $20-billion share repurchase announced in December, McCarthy said.

Fox said it will postpone a special shareholders meeting in order to provide stockholders with an opportunity to evaluate Disney’s amended offer.

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