20 July 2019
The stage has been set for a bidding war between Comcast and Disney to acquire most of the media assets of Twenty-First Century Fox. Photo: Reuters/AFP
The stage has been set for a bidding war between Comcast and Disney to acquire most of the media assets of Twenty-First Century Fox. Photo: Reuters/AFP

Comcast offers US$65 billion to lure Fox from Disney bid

Comcast Corp offered US$65 billion to lure Twenty-First Century Fox Inc. away from a merger with Walt Disney Co., setting up a bidding war between two of the largest US media companies with its 20 percent higher offer, Reuters reports.

Comcast chief executive Brian Roberts said on Wednesday he was highly confident regulators would allow Comcast to acquire most of Fox’s media assets after AT&T Inc.’s court victory on Tuesday, which allowed it to buy Time Warner Inc. for US$85 billion.

The fight to win Fox’s assets is shaping up to be a summer blockbuster starring well-known media moguls, led by Rupert Murdoch who built Fox into a global media empire.

Comcast’s Roberts, who led a failed bid for Disney in 2004, now faces off against Disney chief executive Robert Iger, whose own dealmaking has added heroes from Pixar, Star Wars and Marvel comics to the home of Mickey Mouse.

Fox’s board will now have to decide whether Comcast’s offer beats Disney’s. If Fox prefers Comcast, Disney will have five business days to respond.

Comcast may have a tough time winning over Fox’s largest shareholder, the Murdoch family. They own a 17-percent stake and would face a multibillion-dollar capital gains tax bill by accepting an all-cash offer from Comcast, tax experts previously told Reuters.

Fox shareholders will vote July 10 on the Disney transaction but the company could postpone the meeting, Fox said in a statement.

Some analysts see difficulties for Comcast-Fox, which would add Fox’s movie and television studios to Comcast’s NBC Universal, but Roberts said in a letter to Fox that he would offer the same conditions as Disney and promised to fight for the deal in court if necessary.

A merger between Fox and Comcast would create a company with a stable of well-known media brands and franchises, such as the X-Men superheroes. A combined company would hold the rights to air Fox’s long running TV show The Simpsons, the US rights to the Olympics and Premier League Soccer.

Fox’s international assets such as Star India appeal to both Disney and Comcast, which want to expand their global presence.

Major sports and news assets including Fox News, Fox Business Network and Fox Sports would be spun off into a separate company.

Comcast offered US$35 per Fox share for the media assets, compared with Disney’s stock offer, worth US$29.18 per share at the close of trade on Wednesday.

Comcast offered a US$2.5 billion reverse termination fee if the deal did not go through, the same as Disney. It also offered to pay Fox’s US$1.525 billion breakup fee owed Disney, if Fox went with Comcast.

Comcast said it intended to pursue its US$30 billion acquisition of Sky Plc in parallel with its Fox bid. Comcast bid for Sky in April, after Fox’s bid for the remainder of European pay-TV group it did not already own was delayed by regulators.

Fox in a statement said it had received the proposal and would review it.

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