Comcast has announced that it’s “in advanced stages” of preparing an all-cash proposal to acquire most of the assets owned by 21st Century Fox, including its TV and movie studios, in the latest development in an ongoing multibillion-dollar merger saga involving three of the biggest names in American media. Fox agreed to sell the assets to Disney last December in an all-stock deal with an equity value of $52.4 billion, while reports earlier this month indicated Comcast had lined up some $60 billion in financing for a possible counter-bid.
The negotiations are intertwined with two other massive proposed mergers currently working their way through the regulatory process.
First, there’s the potential $85.4 billion combination of AT&T and Time Warner. It’s believed Comcast is waiting to see whether that deal wins approval before mounting an official bid for Fox. Both deals involve tie-ups of content creators with content distributors and are largely seen as efforts to combat the rises of Netflix and Amazon in the TV and movie spheres.
In a separate-but-related move, Comcast earlier this year announced an offer of £22.1 billion (about $30 billion) to purchase British broadcaster Sky, competing with an earlier bid from Fox. UK regulators announced earlier this week they were unlikely to block a Comcast takeover. Comcast and Fox’s battle in that bidding makes it clear that the fate of a potential deal between the two will have wide-ranging implications on both sides of the Atlantic Ocean.
Comcast’s reveal comes in anticipation of upcoming shareholder meetings for both Fox and Disney, with The Wall Street Journal reporting the broadband giant was concerned the two companies might hold meetings and conduct a vote on the Fox-Disney deal before June 12, the date of an expected decision from a US judge on whether to block the AT&T-Time Warner deal. Comcast could reportedly begin talks with Fox as soon as this week.
The company certainly isn’t waiting until then to make its case for being a better buyer than Disney. In its announcement of a planned bid, Comcast highlighted that its offer will be in cash, while Disney’s is in stock, and that its proposal would represent “a premium” to the existing Disney agreement. While most shareholders would likely prefer cash (let alone a higher price), earlier reports had indicated that a cash deal could lead to a higher tax bill for Fox honcho Rupert Murdoch—meaning he’d prefer a stock transaction—and that a superior cash offer might lead to conflict between Murdoch and other backers.
With no immediate end in sight to the sale process, there will be plenty of time to figure all that out.
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