Published: Wed, May 09, 2018
Money | By Wilma Wheeler

Comcast to make a hostile bid for Fox assets?

Comcast to make a hostile bid for Fox assets?

Citing three unspecified sources "familiar with the matter", the news agency reports that Comcast CEO Brian Roberts sees an opening if USA federal courts approve AT&T's $85b acquisition of Time Warner to go forward - a ruling is expected on that matter in June.

"Assuming Fox continues to pursue a deal with Disney, Fox will need to raise its bid for Sky from its current level of 1,075p plus dividends in order to win control".

He also pointed to the huge increase in Comcast's debt the acquisition of both Fox and British pay-TV group Sky for nearly $100 billion in total would generate. That opened the door to Comcast's counteroffer.

A new report from CNBC indicates that Comcast, which has long tried to acquire assets from 21st Century Fox, could upend the deal offered by the Walt Disney Company.

If Comcast struck a deal with Fox, the telecomm giant would hit a media jackpot, acquiring Fox's film, television and global businesses, giving the company a hefty portfolio to rival rising platforms like Netflix.

Murdoch agreed to sell US entertainment assets - though not the highly profitable Fox News Channel - to Disney, rejecting a higher offer for those assets from Comcast. Comcast is looking to its financial partners behind the Sky offer to increase the bridge financing facility it has already set up for that offer by at least $60 billion in hopes that an all cash offer will help them outbid Walt Disney Studios.

The sources asked not to be identified because the matter is confidential. If it takes place, 21st Century Fox's owner Rupert Murdoch would still keep Fox News and Fox Business Network, which he reportedly plans to consolidate with his News Corp. Fox shares shot 3.6% higher in after-hours trading Monday evening, while Disney stock fell about 0.5% and Comcast declined about 0.1%. "If they acquire both and remain integrated, it would change our thesis (Cable would be less than 50% of the value); however, it would be hard not to be excited about a phenomenal Cable asset coupled with a global content powerhouse, trading at 9x FCF". It is not clear how receptive he would be to an all-cash offer. The deal was subject to approval from Disney and Fox shareholders, and it also needed to be approved by merger and regulatory reviews, as well as meet other "closing conditions".

Comcast has officially notified the European Commission that it will make a bid for Sky.

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