Comcast makes yet another massive counter-offer for 21st Century Fox

Ann Santiago
June 15, 2018

Comcast may have a tough time winning over Fox's largest shareholder, Rupert Murdoch's family. Today, Comcast offered $US65 billion ($86 billion) in cold hard cash to take over 21st Century Fox.

Deadline are now reporting that Comcast have offered an all-cash deal of $65 billion, which eclipses Disney's $52.4 billion all-stock offer, and would seemingly put them in the driving seat. The assets at stake include the Fox film studio (which owns the Avatar franchise, the film rights to the X-Men and Fantastic Four and the original Star Wars), its TV studio, its cable networks and its stake in Hulu.

Major sports and news assets including Fox News, Fox Business Network and Fox Sports would be spun off into a separate company.

Roberts said Murdoch had built "one of the world's great media and entertainment companies", and that its history was similar to that of Comcast's.

The Department of Justice sued in November 2017 to block AT&T's $85 billion acquisition of Time Warner on grounds that the merger could hurt competition in the pay-TV industry. The telecom would also have an interest in getting cable subscribers to switch from their providers to DirectTV (which AT&T already owns). Once the transition is completed, the remaining Fox assets will be formed into a new company, jokingly called "Diet Fox" by Rice, and management changes will be announced over the next year.

Earlier this week, sources claimed that Comcast was keenly watching the AT&T legal battle with the Justice Department to see whether it would be able to acquire Time Warner. Comcast CFO Mike Cavanagh told investors Wednesday that the company stands behind its own Sky offer "independent of whatever happens to Fox".

Image: Disney also wants to buy Fox.

Disney and Comcast could even end up splitting ownership. To survive the great unbundling, AT&T needs a content package strong enough to gain it a share of the "over-the-top" media market. In a statement, Fox said it would "carefully review" the "unsolicited" offer.

Comcast has offered $35 (£26.17) per share in an all-cash offer to buy Twenty-First Century Fox, topping Disney's previous offer by 19 per cent. The two wireless carriers expect the merger to close by the first half of 2019, assuming they get regulatory approval. Despite Comcast's higher offer, it's not immediately clear whether Fox's board would entertain it.

That case was dismissed on Tuesday, giving new impetus to Comcast's proposal and perhaps many more deals like it in the not-too-distant future.

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