Comcast and Disney have hired investment banks, Morgan Stanley and JPMorgan Chase respectively, to value the streaming service Hulu. This is part of an agreement established in 2019, in which Disney can acquire Comcast’s minority stake in Hulu if certain conditions are met. The banks will provide a fair value for Hulu, with a minimum valuation of $27.5 billion set in 2019. However, Comcast CEO Brian Roberts believes that Hulu is now “way more valuable” than in 2019.
The agreement between Comcast and Disney was made after Disney acquired the majority of Fox’s assets, including Fox’s minority stake in Hulu, in a $71 billion deal. Comcast opted not to sell its stake in Hulu right away, as it predicted an increase in the value of streaming video between 2019 and 2024. However, Comcast understood that it would lose operational control over the company’s future. The current process aims to unify ownership and integrate Hulu into Disney’s long-term streaming strategy.
On November 1, Comcast can trigger an option for Disney to acquire its 33% stake in Hulu, or Disney can exercise its option to buy the stake from Comcast. This is expected to happen, and two banks will assess the value of Hulu. If their valuations are within 10% of each other, the average will be the price at which Hulu is valued, and Disney will pay Comcast 33% of that value. If the assessments differ by more than 10%, a third investment bank will be hired to make another valuation, and an average will be calculated. There is no set timetable for the valuation process, but both companies are eager for a resolution.
