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Fox shares pop ahead of expected Comcast bid

15 June, 2018, 01:22 | Author: Melinda Barton
  • AT&T-Time Warner Merger Gets The Green Light From Federal Court

A Comcast-Fox deal would be another vertical merger, like the AT&T-Time Warner deal.

Disney has been the frontrunner for some time, since the two companies reached an agreement in principle, but that deal has not yet been signed off on by stockholders, and Fox honcho Rupert Murdoch said that he is not married to the idea of the Disney deal.

The industry is now turning its eyes to another potential megamerger - the fight between Comcast and Disney to acquire 21st Century Fox.

Disney, however, in November agreed to buy Fox - including its stake in broadcaster Sky - for $54.4 billion in an all-stock deal. "We are in our minds the right buyer with the superior proposal and as much or better certainty and commitments and safeguards for Fox and the Fox board that are the same as those provided by Disney". Whoever wins the bid, should it be accepted by both companies, will acquire much of Fox's film and TV assets, as well as its worldwide holdings (including stakes in UK's Sky and in Star India) and its stake in Hulu.

The Justice Department had pressured Time Warner to sell Turner Broadcasting, which includes the cable news operation CNN, or other segments of the business, which both companies resisted. For example, Comcast is reportedly eager to gobble up some of 21st Century Fox's assets.

"We have long admired what the Murdoch family has built at Twenty-First Century Fox", Comcast CEO Brian Roberts wrote Wednesday in a letter to Fox detailing the proposal.


Their new offer is about 19 percent higher than Disney's proposal, according to its statement.

The move follows a previous bid being rebuffed past year. For instance, AT&T could charge other content providers (including Verizon, which owns HuffPost's parent company, Oath) artificially high prices to air the cable channels it acquired through Time Warner. Disney has made its own $52.4 billion bid for the bulk of the company. It has been reported though that Fox execs are still leaning towards Disney and have asked their shareholders to do the same.

Comcast fell 0.7% to 32 in after-hours trading on the stock market today while Disney slipped 0.3% to 105.90.

Comcast is also offering a breakup fee of $2.5 billion if the deal is not consummated, matching the offer from Disney. Disney wouldn't face the same issues because it isn't a television distributor as the way Comcast and AT&T are. Comcast's new play extends the still-developing saga for the fate of 21st Century Fox, so stay tuned for more updates on how this all will eventually shake out.

If things don't work out for Comcast, however, I am available for outright purchase should they need and will happily accept cash offers of that magnitude.

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