Comcast seeks to upset Walt Disney's bid for Twenty-First Century Fox

Devin Lawrence
May 9, 2018

After having an all stock bid rejected by Fox in December, Comcast is reportedly lining up as much as $60 billion in a bridge loan to render to re-approach the media company with an all-cash offer.

In December past year, Walt Disney signed an agreement to buy the film, television and global businesses of Rupert Murdoch's Twenty-First Century Fox in an all-stock deal worth $52.4 billion, as the USA entertainment giant seeks scale to fight growing competition from digital rivals.

Comcast also intends to acquire 100 percentage of United Kingdom satellite broadcaster Sky as part of an enhanced all-cash bid.

Shares in the commercial broadcaster fell by 19p to £13.53½ on the back of a Reuters report which said that Comcast had asked banks to bump up a bridging loan by as much as $60 billion so that it could make an offer for the film, television and global assets of 21st Century Fox.

According to a regulatory filing, Comcast offered to acquire Fox's entertainment networks, movie studios, television production and global assets in an all-stock deal valued at $34.41 per share, or $64 billion. Visit MarketWatch.com for more information on this news.

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"Comcast and Disney are likely to view this as the last remaining transformational deal in media".

Reuters reports that Murdoch, whose stake in Fox is close to 17%, would prefer an all-share offer for the Fox assets as a way of thwarting the taxman. Disney is already in line to own all of Sky if it is able to complete the deal for the 21st Century Fox assets. That opened the door to Comcast's counteroffer.

"At the margin, the news may be seen as negative for investor sentiment on Sky as it may limit Comcast's ability to counter-bid should Fox raise its offer for Sky", UBS said. Investors in Sky expect Fox to return with a higher offer if it can secure approval from Britain's media secretary, who is reviewing that bid.

Analyst Richard Greenfield with BTIG Research said Comcast can make the math work on an all-cash deal and that the synergies are greater for Comcast/Fox/Sky than Disney/Fox/Sky due to distribution overlaps.

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