FOXA, ROKU: Fox to Acquire Roku - "Tu-bi Continued with Roku"

Research evidence excerpt

FOXA, ROKU: Fox to Acquire Roku - "Tu-bi Continued with Roku"

June 15, 2026

"Clever like a fox?" Why now? Aside from equity dilution and investment thesis change, we sense market concern

about the signals of Anthony Wood's decision to sell and Fox's willingness to issue so many FOXA shares. Investors

may speculate that Wood is selling while the business's growth is at its best and the stock is fully valued. Powerful

CTV OS competitors Amazon Fire, Google TV, and Wal-Mart/Vizio have increased investment in market share.

Interlopers to consider: Fox / Roku sounds like a done deal after Roku's "thorough review" prior to the agreement and

with Anthony Wood staying on the team at Fox. There is some chance that Disney, Netflix, or Comcast offers a greater

bid in response to the diminished value of the Fox deal's stock component. Each of those companies can easily make

an all cash offer.

What does this mean for Fox as a stock? The Fox investment case will remain anchored in attractive niches -- sports,

news, AVOD, and CTV OS. The company's growth model will become much more dynamic, fueled by R&D and cross

selling. The combined Fox + Roku portfolio would be the third-largest streamer by US engagement in a category growing

+DD% w/ greater influence over consumer behavior by owning the OS in half of US broadband households. Fox's

trend sales growth rate could more than double to 6%, exceeding Disney and Paramount-Warner and producing

operating leverage and a double digit FCF / share growth trajectory.

While we are not updating our price target, in the near-term we think the market will discount "A+B" valuation

frameworks to reflect higher uncertainty, leverage, and a developing investment thesis.

Exhibit 1 - Fox / Roku Transaction Sources & Uses