Fox-Roku Deal Spread Narrows to $1.25 After Foreign Approvals Completed
Key Facts
The spread on Fox’s acquisition of Roku narrowed to $1.25 on Monday from $2.18 on Friday after Fox said it had completed foreign regulatory approvals, Seeking Alpha reported. On its earnings call, Fox said the companies continue to cooperate with the U.S. Justice Department to obtain approval required under the Hart-Scott-Rodino Act. The department’s review remains ongoing after it requested additional information from both parties. The spread narrowed over the two trading days cited, alongside Fox’s announcement. The company said the U.S. regulatory process is not yet complete.
The Justice Department issued a second request for additional information to Fox and Roku on September 8, 2026, according to Fox’s filing with the U.S. Securities and Exchange Commission. Known as a second request, the measure requires both parties to provide additional information and documents as part of the deal review. The waiting period ends when both parties have substantially complied with the request, not when it is issued. After that compliance, the waiting period runs for 30 days. The department may end it before the period expires, and the filing says the parties may also agree to extend it.
Fox expects to complete the deal in the first half of calendar year 2027, subject to the expiration or termination of the waiting period and the satisfaction or waiver of customary closing conditions. The forecast sets out a public timeline, but remains conditional on completion of the U.S. review process. The chief executive said Fox and Roku continue to work with the department to obtain approval under the Hart-Scott-Rodino Act. He added: "We continue to work cooperatively with the Department of Justice to obtain Hart-Scott-Rodino approval." The next steps remain tied to compliance with the second request, followed by the waiting period’s expiration or early termination.
Under the consideration terms Fox announced, Roku shareholders will receive $96 in cash and 0.9693 shares of Fox Class A stock for each Roku Class A or Class B share. The company said the stock exchange ratio is fixed. The offer therefore combines a specified cash amount with shares in the acquirer. Fox expects its shareholders to own about 73% of the combined company after closing, compared with about 27% for Roku shareholders. Those projected stakes remain contingent on completion of the deal.
Fox estimated ongoing annual cost savings of about $400 million after the deal closes, with the potential for additional revenue. The estimate is among the commercial rationales the company cited for the acquisition. In its first-quarter fiscal 2027 results, Fox reported revenue of $4.57 billion for the three months ended September 30, 2026, up 22% from the year-earlier period. Advertising revenue also rose 47% year over year. The company attributed the increase mainly to the men’s World Cup, political advertising and continued digital growth led by Tubi.
Fox’s distribution revenue rose 9% in the first quarter of fiscal 2027, driven by growth of 10% in the Cable Network Programming segment and 4% in the Television segment. Adjusted earnings before interest, taxes, depreciation and amortization were $1.64 billion, up 54% from a year earlier. Net income was $957 million, compared with $609 million in the corresponding quarter of fiscal 2026. Fox said higher expenses were mainly tied to increased amortization of sports programming rights and production costs, led by the World Cup, along with higher digital content costs. The results come as the company pursues the acquisition, with completion expected in the first half of 2027 still subject to the review process and closing conditions.