Comcast has reportedly prepared a counter bid for 21st Century Fox and its assets to thwart attempts by Disney. It has been reported that he former has prepared bid for $65 billion all-cash offer to counter the $52.4 billion deal agreement that Disney and Fox had reached in in December
This move by Comcast followed the very significant judgement by a U.S. court that allowed the $85 billion takeover of Time Warner by AT&T despite stiff opposition to the deal by the administration of US president Donald Trump.
The entertainment industry is undergoing a fast and significant change towards online channels and both Comcast and Disney are keen to purchase Fox to enhance their position in the fast-evolving industry.
Online services like Netflix are becoming more popular among consumers as they tend to choose them over high priced cable subscriptions. Purchasing Fox is a way to scale up.
In addition to regional sports networks and cable channels like FX and National Geographic, Fox’s movie studio that produced franchises like “Avatar” and “X-Men” would also go to the winner of the Comcast-Disney battle.
Fox’s stake in Hulu, the streaming service with 20 million viewers would also get into the hands of the winner. While both Comcast and Disney have their own stakes in Hulu, whoever buys Fox would get control over a majority stake.
Sources have told the media that even though Comcast desires Fox’s stake in Hulu, it would give it up if demanded by regulators.
Additionally, its stake in the European broadcaster Sky would also be given up by Fox. That would allow either of the two warring companies to set up its footprint abroad. Both the companies want to take over Sky. According to a Wednesday statement by Comcast CFO Mike Cavanagh to investors, the company is firm on its own Sky offer “independent of whatever happens to Fox.”
Fox News, the Fox Sports national cable channels and the Fox broadcasting network are among few of the properties that are being kept by Fox’s Rupert Murdoch. Those will be spun off into a new company.
“We have long admired what the Murdoch family has built at Twenty-First Century Fox,” Comcast CEO Brian Roberts wrote Wednesday in a letter to Fox detailing the proposal.
Comcast was in talks to buy Fox late last year but was turned down in favor of Disney in part because some of the major investors in Fox were not sure whether the deal by Comcast would pass regulatory scrutiny. It was around that time that the AY&Y and Comcast deal was blocked by the U.S. Justice Department and filed a case in court.
(Adapted from Money.CNN.com)