Comcast prepares to top Disney's $50 billion offer for Fox

Rupert Murdoch

Comcast, which owns NBC Universal, said it had not made a final decision on whether to make a formal offer but that the work on financing a bid and making regulatory findings were "well advanced". 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.

As many in the media business and on Wall Street had been predicting since word surfaced two weeks ago of Comcast meeting with bankers to line up financing, the NBCUniversal owner and No. 1 US cable distributor said a rival bid is in the "advanced stages".

Comcast is threatening to roil a plan by Disney to bolster its dominance in entertainment. The summer meetings are when 21st Century Fox and Disney shareholders are expected to vote on the proposed $52.4 billion acquisition of the Fox assets - neither company has specified a date as yet for its vote.

Comcast may have a tough time winning over Fox's largest shareholder, Murdoch, however.

"Comcast - if they pursue this - are throwing their balance sheet and credit rating to the wind", Moody's Investors Service analyst Neil Begley warned on Wednesday. Comcast shares closed down 1.9 percent at $31.88 and Disney shares fell 1.1 percent to $102.89. Even before the announcement, Comcast's expansion plans have weighed on the shares, which are down 19% this year.

The move threatens to escalate a bidding contest that's already underway over Fox's European satellite business - and further complicate a global game of M&A chess that's being waged by the biggest media companies.

Comcast has confirmed it is preparing to top Disney's $52bn (£39bn) bid for 21st Century Fox.

"For Disney, Fox represents an opportunity to deepen its sports offering and strengthen ESPN with Fox sports".

Separately, Comcast last month made an offer of $30.7 billion in cash for Sky, in a move welcomed by the British firm.

Comcast had explored buying the Fox assets back in December, floating an offer of roughly $60 billion, but Fox leaned toward Disney's lower dollar-value bid amid concerns over possible antitrust issues. "That's what we tried to do and we are no longer engaged in the review of those assets".

Fox declined to comment on Comcast's statement. Fox's assets would help both companies achieve these goals, said Paul Sweeney, an analyst at Bloomberg Intelligence. But if the government successfully shuts down the Time Warner merger, then Fox and Comcast probably won't be joining forces any time soon.

The Disney offer stands at approximately US$52.4 billion.



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