The bidding wars: Comcast challenges Disney in a fight for FOX

Pauline Gross
May 24, 2018

We have recently reported on the rumors of Comcast coming back in, and the fact that Disney could be prepared to let go of Sky TV in order to make sure they get their hands on those IP's.

Comcast says it may make an offer for Twenty-First Century Fox, opening the door for a bidding war with Disney. Comcast has not said officially how much it will bid for the Fox assets, but analysts say it could be 15 percent to 25 percent higher than Disney's offer.

Disney reached a $52.4 billion deal in December to buy Fox's movie studio and regional sports networks, as well as cable channels FX and National Geographic. But the company said that a bid would be all cash and at a premium to the value of Disney's current all-stock offer.

After a sale, Fox's remaining assets will include Fox News, Fox Business Network and sports cable networks.

Reports earlier in May indicated that Comcast was speaking with investment banks and preparing a bid to surpass Disney's $52 billion offer. Disney's bid arrived as the company is planning its own streaming services to compete with the likes of Netflix and Hulu - the latter of which all three companies now own a partial stake in. There are few other domestic or global companies with the revenues or profits that could meaningfully help Comcast grow through acquisitions, he said.

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There are also significant expenses related to capital-gains taxes in the case of all-cash offers, compared with stock transactions - one reason why Rupert Murdoch, who owns 17% of Fox has leaned away from cash deals.

He wants Murdoch and company to engage with Comcast on an offer. "It also opens up doors to own an even richer content library to counter heavyweights such as Netflix", he said. But the controlling family and shareholders would face pressure if the new offer is richer than the one from Disney. And while Disney's status as the biggest studio in Hollywood will likely get its bid a lot of support, the promise of an extra $8 billion really could be a deciding factor.

The other major x-factor is AT&T's attempt to merge with Time Warner. The Justice Department sued to block the $85 billion merger of AT&T and Time Warnera year after the two companies agreed on the deal.

Earlier this week, Comcast's bid for Sky was given a boost when the culture secretary said he was "minded not" to refer it to broadcasting regulator Ofcom to assess any potential public interest concerns.

Daniel Ives of the research firm GBH Insights said he expected a pitched battled for "these golden entertainment assets of Fox" as traditional media groups gird for competition against streaming and tech firms.

Other reports by GizPress

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