Comcast preps Fox offensive with new bid

Randal Sanchez
May 9, 2018

In a move that could topple Disney out of the running, USA cable operator Comcast has reportedly held talks with American banks to secure around $60bn in financing for a hostile bid for 21st Century Fox Inc.'s entertainment and worldwide assets, according to Reuters.

Comcast CEO Brian Roberts plans to table a bid only if a federal judge allows AT&T Inc's planned $85-billion acquisition of Time Warner Inc to proceed, the report said.

The latest move shows how AT&T's controversial bid for Time Warner, which owns media properties including Warner Bros and HBO, has rattled telecom and media competitors such as Comcast, which are anxious AT&T would become a dominant market force if allowed to acquire Time Warner. Comcast is preparing a $60 billion hostile bid, while Disney is ready to offer a $52 billion stake exchange according to an agreement reached at the end of December 2017. That opened the door to Comcast's counteroffer. While Disney and Fox's respective boards of directors approved the deal, it hasn't gone through yet. 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%. By U.K. law, Disney would have to make an offer for all of Sky if it were to acquire Fox's 39% interest.

Shares of Twenty First Century Fox rose nearly three percent on Tuesday after Reuters reported that cable operator Comcast Corp.

Rupert Murdoch, who owns a almost 17-per cent stake in Fox and holds about 40 per cent of the voting power, prefers to be paid in stock rather than cash for the Fox assets, since an all-stock offer will not be taxable for shareholders, Reuters said.

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Comcast Corporation shares were unchanged in premarket trading Tuesday.

Sources have said that Rupert Murdoch, who owns close to a 17 percent stake in Fox and therefore has a large potion of the voting power, prefers to be paid in stock rather than cash for the Fox assets - because doing so supposedly makes the transaction non-taxable for shareholders.

It is not clear how receptive he would be to an all-cash offer, the report added.

Further complicating the picture is a £22 billion bid that Comcast has made to acquire a 61% stake in United Kingdom pay-TV company Sky (NYSE, London: SKY).

The buyout would include Fox channels including FX and Nat Geo, among others, but would not involve Fox News, Fox Business Network, Fox Sports 1 or 2, the Big Ten Network or the Fox broadcasting network and stations. This article is strictly for informational purposes only.

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