Comcast lets Disney win the 21st Century Fox bidding war

Calvin Saunders
July 20, 2018

The Comcast NBC logo is shown on a building in Los Angeles, California, U.S. June 13, 2018.

Comcast on Thursday said it would drop its bid to buy key portions of 21st Century Fox, ending a bidding war between the Philadelphia-based cable giant and the network's likely new owner, The Walt Disney Company. Despite the clearance, satellite pay-TV group Sky could still end up being bought by Comcast or Disney amid a USA media industry tug-of-war.

Both Comcast Corp. and Fox want Sky in order to amass more programming as they compete for viewers with both traditional TV networks and technology companies such as Netflix and Amazon. Last week, Comcast made a bid that values Sky at $US34 billion, compared with $US32.5 billion in Fox's offer. Disney shares were up 1.6 percent. If Comcast is able to prevail, then Disney and Comcast, who were just fighting over Fox, will end up sharing ownership of Sky. They now have a $34 billion offer on the table. We'll have to wait and see.

21st Century Fox is the parent company of FOX Business.

Sky didn't immediately respond to a request for comment.

"We're extremely pleased with today's news, and our focus now is on completing the regulatory process and ultimately moving toward integrating our businesses."

Comcast also faced a potentially hostile Justice Department over an antitrust regulatory review of a Comcast/Fox deal.

Comcast drops bid for 21st Century Fox assets

Comcast chairman and CEO Brian Roberts congratulated Disney saying, "I'd like to congratulate [chairman and CEO] Bob Iger and the team at Disney and commend the Murdoch family and Fox for creating such a desirable and respected company". It already has classic Disney cartoons, "Star Wars", Pixar, the Muppets and some of the Marvel characters.

Are you excited for Disney to finally acquire Fox? They are set to pay $52 billion for Fox and all of the assets that come with it, with the big exception of Fox News, Fox's broadcast networks, and its sports channels.

"Our view is that probably there is less chance of Fox/Disney coming back with an increased offer for Sky given that Comcast would have more available firepower", said Liberum analyst Ian Whittaker.

Comcast's stock rose more than 2.5 per cent in Thursday premarket trading.

For Comcast, a Sky deal would make it the world's largest pay-TV operator - it is already the biggest in the USA - and at a stroke reduce its nearly total dependence on the United States for revenues. That's a 5% premium over Fox's most recent £14.00/share offer to purchase the 61% of shares in Sky that it doesn't already own.

However, smaller media companies could become acquisition targets.

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