Let the gamesmanship begin.

After topping Comcast Corp.'s (CMCSA) bid for Twenty-First Century Fox Inc.'s (FOXA) on Wednesday, Walt Disney Co. (DIS) Chairman and CEO Bob Iger touted his company's advantage with regulators in an investor call. 

"We're already six months into the regulatory process and we are confident we have a clear and timely path to approval," Iger told investors regarding Disney's proposed acquisition of Fox. 

Disney said it would pay Fox $38 per share in either cash or stock, exceeding Comcast's offer of $35 per share in cash. Comcast declined to comment on the bid, while Fox said the new bid meant it would cancel its planned Wednesday shareholder meeting to vote on the Comcast bid. 

Shares of Fox gained 6.7% to $47.24 and Disney rose 1% to $107.23 on Wednesday after the revised bid was announced. Comcast edged up 0.1% to $32.87.

The price comes to $71.3 billion billion in cash and stock, including $35.7 billion in cash and about 343 million shares of Disney that would give Fox shareholders a 19% stake in the combined company. Disney would also take on $13.8 billion in net debt, pushing the total valuation to $85.1 billion.

Iger denied that Judge Richard Leon's decision to clear AT&T Inc.'s (T) purchase of Time Warner Inc. (TWX) gave Comcast a green light to bid for Fox. In a ruling on June 12, Judge Leon rejected a Department of Justice suit to block the transaction on AT&T's pay-TV and wireless distribution networks with Time Warner's film and TV production. 

On Wednesday's call, the Disney CEO quoted a passage from the ruling which stated that a vertical merger "can generate competitive harm" and that "the temptation by some to view this decision as being something more than a resolution of this specific case should be resisted by one and all," during the call.

"One and all, as we read it, surely includes Comcast," Iger said. 

The battle continues.
The battle continues.

Disney and Comcast both want to buy Fox's film and TV studios and related operations; cable networks including FX Networks; Fox Sports Regional Networks; international networks; Indian satellite TV group Star India; and stakes in National Geographic Partners, Hulu LLC, UK satellite TV group Sky and others. Fox and Comcast are also bidding for European satellite TV company Sky plc.

Comcast's bid would present considerations that were not present in the AT&T case, Iger argued.

In addition to being the largest cable company, and the second-largest pay-TV provider behind AT&T's DirecTV, Iger noted that Comcast is the largest U.S. broadband company, with about 40% market share. 

Comcast also owns portfolio of film and television assets, including NBC and affiliated TV stations, Universal Studios and cable networks including Bravo, E, USA and Telemundo.

"It's simply an apples-to-oranges comparison to what the Justice Department was considering, when it considered the AT&T acquisition of Time Warner," Iger said.

The sweetened bid would push Disney's leverage to 4.0 times Ebtida if Fox completes the purchase of Sky, and 3.4 times Eibitda if Fox does not buy Sky, Disney CFO Christine McCarthy said on the call.

"We are very comfortable with this level of leverage," McCarthy said. However, she added that Disney no longer plans to complete a $20 billion share buyback that the company announced in December.

Despite the increased leverage, Iger rejected the possibility that Disney could pursue a less costly alternative such as divvying up Fox's assets with Comcast.

"The answer is no," he said, adding that the terms of the deal with Fox preclude an asset split.

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