Comcast bid to buy Fox promised to top Disney's

Ann Santiago
May 25, 2018

U.S. media and cable giant Comcast said today it is preparing an all-cash offer for the key television and entertainment assets of 21st Century Fox that would top an offer on the table from Walt Disney Co. Disney has offered to buy the Fox assets for Disney stock and Comcast has been telling investors that its cash deal would be "superior" for Fox shareholders - or a sure thing with hard cash vs. Disney stock that could sink in value.

The £17.5bn Fox bid to buy the shares in Sky it does not have has become mired in regulatory hurdles, with Fox awaiting a decision within weeks on whether its remedies to satisfy media plurality concerns will prove acceptable to the government.

In a press release published today, Comcast announced that they are in the "advanced stages" of preparing an offer for the media company. Earlier this month, Comcast said it will add Netflix to some cable bundles. Comcast was talking to investment banks about obtaining bridge financing for the all-cash deal, the person said at the time.

Disney in December offered stock then worth $52.4 billion to buy Fox's film, television and global businesses as it bids to beef up its offering against streaming rivals Netflix Inc and Inc. Comcast said at the time that it "never got the level of engagement needed to make a definitive offer". "Content is king, the most important thing". Maybe the stock could be broken up a little more, with Comcast and Disney choosing the assets that suit them? This doesn't mean that Comcast will automatically get Fox, but it does spell trouble for Disney. Even before the announcement, Comcast's expansion plans have weighed on the shares, which were down 19 percent this year through Tuesday's close. Comcast shares closed down 1.9 percent at $31.88 and Disney shares fell 1.1 percent to $102.89. Fox's Executive Chairman Lachlan Murdoch said earlier this month that the company was committed to its agreement with Disney.

Comcast is already making an ambitious push in Europe that centers on United Kingdom satellite broadcaster Sky Plc.

The deal would also make Disney one of the biggest players in sports television.

Comcast, owner of NBC and Universal Pictures, has also made a 22 billion pound ($30 billion) offer to acquire the 61 percent stake in European pay-TV group Sky Plc that Fox does not already own. The Department of Justice has sued to block AT&T's $85 billion deal for Time Warner. If that transaction is thwarted on antitrust grounds, Comcast would have less reason to pursue Fox.

Updated May 23, 2018, with more details about another Comcast offer. Fox's assets would help both companies achieve these goals, said Paul Sweeney, an analyst at Bloomberg Intelligence.

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