Published: Fri, May 25, 2018
Money | By Wilma Wheeler

Comcast Preparing "Superior" Bid to Purchase Fox

Comcast Preparing

Comcast Corp. confirmed that it may make an offer for the entertainment assets that 21st Century Fox (fox) has agreed to sell to Walt Disney Co.

Comcast had explored buying the Fox assets back in December, floating an offer of roughly $60 billion, but Fox leaned toward Disney's lower dollar-value bid amid concerns over possible antitrust issues.

Any offer would be "all-cash and at a premium" to Disney's all-share offer, Comcast said in a statement. Now Comcast is prepared to swoop in to outbid Disney for assets that include the prolific 20th Century Fox film studio, the independent film company Fox Searchlight, the FX and National Geographic channels, and more.

It's also the latest in a dizzying period of merger moves in tech and media: In addition to Disney's deal for Fox, Comcast is trying to undermine Fox (yes, the same Fox) to win 61 percent of United Kingdom television company Sky TV, and AT&T is trying to buy TV programmer Time Warner despite government opposition. But getting the X-Men, the Fantastic Four, and Deadpool into the Marvel Cinematic Universe would be a pretty good consolation prize.

The assets set to be purchased include everything under 21st Century Fox, sans the Fox broadcast network, Fox News, and local TV stations. Fox executive co-chairman Lachlan Murdoch said on the company's recent earnings call when asked about a potential Comcast bid: "We are committed to our agreement with Disney and are working through the conditions to bring it to a closing".

Added the cable gaint: "While no final decision has been made, at this point the work to finance the all-cash offer and make the key regulatory filings is well advanced".

"I think Fox, or its controlling shareholder and Board of Directors, has already expressed their preference - Disney, even though Comcast allegedly offered a higher consideration already", said Jeffrey Logsdon, an analyst with JBL Advisors in California.

Early Wednesday morning trading saw Fox's stock up 1% to $38.55; Comcast was down 1.7% to $31.96, while Disney slipped 1.4% to $102.60.

"In our opinion [the deal] is integral to the streaming ambitions of [Bob] Iger [Disney chief executive] and Disney", said Ives. Separately, Comcast received preliminary consideration from a United Kingdom government official to pursue an effort to buy Sky for $31 billion.

The deal would also make Disney one of the biggest players in sports television. Some reports said Murdoch had previously rejected an offer from Comcast.

There's also the small matter of needing Fox shareholders' approval for any deal to go through.

Jeffrey Logsdon, an analyst with JBL Advisors, said that Comcast seems intent on winning a bidding war for Fox.

Updated May 23, 2018, with more details about another Comcast offer. 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.

Like this: