Comcast today made a $65 billion offer to buy major portions of 21st Century Fox, setting up a potential bidding war with Walt Disney Company.
Disney already struck a $52.4 billion all-stock deal to buy the Fox properties, but Comcast announced that it is making an all-cash offer to “provide [Fox] shareholders with certain value and immediate liquidity.”
The offer comes one day after a judge rejected the Trump administration’s attempt to block AT&T’s purchase of Time Warner Inc. The ruling suggests that Trump’s Department of Justice wouldn’t be able to stop a Comcast/Fox deal.
Comcast was encouraged to move ahead with this offer by “yesterday’s decision in the AT&T/Time Warner case,” Comcast CEO Brian Roberts wrote in a letter to the Fox board of directors and the Murdoch family.
Comcast is “highly confident that our proposed transaction will obtain all necessary regulatory approvals in a timely manner and that our transaction is as or more likely to receive regulatory approval than the Disney transaction,” Roberts wrote.
Fox previously rejected an offer from Comcast, reportedly because it was concerned about getting regulatory approval.
Comcast was “disappointed when [21st Century Fox] decided to enter into a transaction with The Walt Disney Company, even though we had offered a meaningfully higher price,” Roberts wrote.
Comcast today offered to match the $2.5 billion breakup fee that Disney previously agreed to. “To further evidence of our commitment, we also are offering to reimburse the $1.525 billion breakup fee to be paid by you to Disney, for a total cost to Comcast of $4.025 billion, in the highly unlikely scenario that our transaction does not close because we fail to obtain all necessary regulatory approvals,” Roberts wrote.
Spinoff and sale
The sale to either Disney or Comcast would include 21st Century Fox’s film and television studios; cable entertainment networks; the Fox Sports Regional Networks; and international properties including Star in India and Fox’s 39-percent ownership of Sky across Europe.
The sale would also include Fox’s 30-percent stake in Hulu. Comcast already owns 30 percent of Hulu, so this deal would give it majority control of the online video service. Disney also has a 30-percent stake in Hulu, while Time Warner owns 10 percent of the company.
The Fox sale would not include major assets such as the Fox News Channel, Fox Business Network, and Fox Broadcasting Company. Those would be spun off into a new company, and Comcast or Disney would acquire 21st Century Fox after the spinoff.