Comcast offers US$65B for Fox, topping Disney's bid

14 June, 2018, 15:10 | Author: Regina Lloyd
  • AT&T, Time Warner Merger Approved by Judge

Disney's deal includes Fox's stake in United Kingdom -based Sky, a film studio, cable networks and other assets.

Roberts said the all-cash bid was almost 20 percent richer than the $52 billion stock offer from Disney, and said Comcast would match the Disney offer of a $2.5 billion fee if the deal failed to win regulatory approval.

Remarkably, however, it doesn't appear that Comcast is willing to take the risk, as the global telecommunications conglomerate took the fight directly to 21st Century Fox shareholders in a 43-page proxy solicitation, "urging them to reject the Disney merger" in favour of their more lucrative offer. Comcast's offer is about 19 percent higher than Disney's.

Those fears subsided yesterday, at least in the eyes of Comcast, when a U.S. district judge overruled the DOJ and declared that the AT&T-Time Warner deal could proceed without antitrust fears.

Comcast may have a tough time winning over Fox's largest shareholder, Rupert Murdoch's family. It's widely thought that Comcast may now make a bid for Fox, and that CBS and Viacom may merge.

Announced in October 2016, the deal was quickly denounced by Donald Trump, who as a candidate and later as president has been critical of Time Warner's CNN and its coverage.

The company on Wednesday formalized a $65 billion all-cash bid for most of Fox. Other similarities in the bids include a divestiture package that would see the selling off of Fox's regional sports networks or any part of the business representing pre-tax earnings of up to $500 million.

"We are pleased that, after conducting a full and fair trial on the merits, the Court has categorically rejected the government's lawsuit to block our merger with Time Warner", David McAtee, AT&T General Counsel, said in a statement.

"Disney has the superior balance sheet, cost of debt, equity and rationale to emerge victorious over Comcast in a bidding war", Moffett said. Fox has a pending deal for the rest of the broadcaster, which it agreed to pass off to Disney.

United States government regulators tried to block the US$85 billion (NZ$120bn) deal, arguing the merger would reduce competition in pay TV and lead to higher prices for consumers.

"We hope this is precautionary only, as we expect to work together to reach an agreement over the next several days", Comcast says.

AT&T and Time Warner's lead lawyer, Daniel Petrocelli, said outside court that the companies were gratified and relieved. This was the biggest antitrust case in many years, potentially paving the way for similar deals among other companies.

Comcast's latest overture - the second it's made in the months since Disney first struck its initial agreement with Fox late past year - follows a court ruling earlier this week that cleared a path for another giant media merger between AT&T and Time Warner. A big potential barrier between a Comcast acquisition of Fox's assets, though, would have been getting past government regulators.

Comcast said it is confident it will win regulatory approval and that its new offer "fully addresses" the stated concerns.



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