Comcast challenges Disney with $65 billion bid for Fox

Alicia Cross
June 14, 2018

It sets up a battle between two major conglomerates for the assets of another major conglomerate. basically, "Game of Thrones" but with houses worth billions of dollars.

The deal, if approved, would merge Comcast-owned Universal Studios and the NBC television network with Hollywood rival 20th Century Fox, Fox's cable entertainment networks and worldwide TV businesses. Comcast, for example, would like to outbid the Walt Disney Co. for some of 21st Century Fox's assets, but has held off until the trial ended.

Comcast, the cable provider, will likely enter a competing bid for Fox to challenge Disney's if the AT&T deal was approved.

Under Comcast's new proposal, 21CF shareholders would receive $35 per share in cash and 100% of the shares of "New Fox", which would comprise Fox Broadcasting and its TV station group, plus Fox News Channel, Fox Business Network and the Fox Sports group.

When a federal judge rejected the Justice Department's suit against the Time Warner, it was seen as an endorsement of so-called vertical mergers - combinations that include both media distribution and the programming itself. With Wednesday's bid, Comcast Chief Executive Officer Brian Roberts is seeking to disrupt Disney CEO Bob Iger's plan to use Fox properties to bolster his company's already-vast entertainment offerings.

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Critics pointed out that the deal wouldn't be the end of such massive mergers, and may in fact open the doors to similar acquisitions among other companies. With AT&T's victory over the DOJ, it seems likely that Comcast will put together its bid for Fox quickly. It's unclear at the present time if Fox will stick with the Disney deal or start a potential bidding war. According to regulatory filings, an unnamed company, widely thought to be Comcast, previously made an offer for Fox. President Donald Trump, while still a candidate, said he would block the deal "because it's too much concentration of power in the hands of too few".

The biggest impact of this deal will be felt quickly, as Comcast will now formally make an offer to Fox for the majority of its assets. That's a grand total of $65 billion, which is 19% better than the current Disney offer. The Trump Justice Department sued to block the $85 billion merger, arguing that it would hurt competition in pay TV and cost consumers more to stream TV and movies. In hopes of swaying Fox's decision, Comcast issued a 43-page message to Fox shareholders in hopes of sealing the more lucrative deal.

In a massively controversial decision, US District Judge Richard Leon has ruled that AT&T can acquire Time Warner, and do so without any conditions placed on it.

Comcast has said it will add Netflix to some cable bundles.

Comcast said it is confident it will win regulatory approval and that its new offer "fully addresses" the stated concerns.

Other reports by Free-Prsite

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