Comcast Corp. says it is preparing a higher, all-cash offer for most of the media assets of Twenty-First Century Fox, setting up a bidding war with rival Walt Disney Co., which already has agreed to a US$52-billion deal with Fox.
The largest US cable operator said it was in advanced stages of readying a bid that would be superior to Disney’s all-stock offer, Reuters reports.
“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,” Comcast said in a statement.
By going public with its plans, Comcast is putting pressure on Fox and its shareholders not to rush into approving the Disney deal. Fox shareholders will vote on the Disney deal later this summer, although a date has not been set.
Comcast may have a tough time winning over Fox’s largest shareholder, however. The Murdoch family owns a 17 percent stake in the US TV and movie giant and would face a multibillion-dollar capital gains tax bill if he accepted an all-cash offer from Comcast, tax experts have told Reuters.
A large Fox shareholder, British activist TCI Fund Management, wrote a letter to Murdoch on Wednesday saying it was imperative for Fox’s board to run a fair auction and sell to the highest bidder.
“If Comcast formalizes a superior all-cash offer, we would support that offer over the current Disney offer,” TCI founder Christopher Hohn said in the letter. TCI owns 7.4 percent of Fox.
Sources familiar with the matter told Reuters earlier this month that Comcast was working on financing for a cash offer worth as much as US$60 billion for the Fox assets.
Fox’s executive chairman Lachlan Murdoch said earlier this month that the company was committed to its agreement with Disney but added that Fox’s board was aware of its fiduciary duties on behalf of all shareholders.
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