Fox shares up on potential Comcast offer

09 May, 2018, 00:59 | Author: Shannon Aguilar
  • Comcast only plans to proceed with the bid if a federal judge allows AT&T's planned $85 billion acquisition of Time Warner to proceed. Matt Rourke  AP

Reuters reported that Comcast is asking investment banks to increase a bridge financing facility by as much as US$60bn so it can make an all-cash offer for the media assets that Fox has agreed to sell to Walt Disney Co (NYSE:DIS) for US$52bn.

Comcast attempted to acquire Fox's assets a year ago in a bid worth US$64 billion, but Fox opted to recommend Disney's lower bid, citing regulatory hurdles that would have stood in the way of an alternative scenario. The company is reportedly awaiting a ruling from a United States judge sometime next month regarding USA telecommunications provider AT&T's planned acquisition of media conglomerate Time Warner before it makes a cash offer for 21st Century Fox.

Comcast plans to put $52 billion (€43.7bn) in cash on the table for the majority of the Fox's assets. That opened the door to Comcast's counteroffer.

Disney shares fell 1 percent in morning trade in NY, while Comcast's dipped 3.5 percent to $31.25.

Raising the funds indicates the resolve by Comcast CEO Brian Roberts to do a deal despite rejections from media mogul Rupert Murdoch, who controls 21st Century Fox since late 2017.

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However, if Comcast were to get Fox's assets, the rights to these characters wouldn't automatically revert to Disney as it's unknown what the specific contractual conditions would be for Marvel to get the X-Men back and if Constantin Films, who now owns the rights to the Fantastic Four, would give the rights back (though it's possible that Constantin sells to the rights to Disney). He added that if Comcast acquires Fox, it might lead to Comcast spinning off its cable/internet and entertainment businesses into separate companies.

Shares in Sky were down 1.5% at 1,352p in mid-morning trading. It is not clear how receptive he would be to an all-cash offer.

"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. The deal was subject to approval from Disney and Fox shareholders, and it also needed to be approved by merger and regulatory reviews, as well as meet other "closing conditions".

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. This article is strictly for informational purposes only. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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