Comcast challenges Disney for control of 21st Century Fox assets

Comcast Preparing

Further complicating things here is the fact that Comcast is now in a bidding war for Sky. Comcast said that Wednesday morning's announcement was made "in view of the recent filings with the U.S. Securities and Exchange Commission" by Disney and Fox in advance of their upcoming shareholder meetings slated for the summer.

"While no final decision has been made", the telecommunication conglomerate said in a statement, "at this point the work to finance the all-cash offer and make the key regulatory filings is well advanced". What's at stake are Fox film and TV studios, cable networks like FX and National Geographic, and regional sports operations.

"Any offer for Fox would be all-cash and at a premium to the value of the current all-share offer from Disney", Comcast writes. During an earnings call two weeks ago, executive chairman Lachlan Murdoch said the company would not "engage in a lot of speculation around this", though he added that Fox is "committed to our agreement with Disney".

After the Justice Department sued to block AT&T (T) from buying CNN parent company Time Warner (TWC), a Disney-Fox or a Comcast-Fox deal would nearly certainly face antitrust scrutiny.

"When a set of assets like 21st Century Fox's becomes available, it's our responsibility to evaluate if there's a strategic fit that could benefit our company and our shareholders", Comcast said back in December. With the acquisition of Fox's broadcast networks, Disney would own numerous local Fox networks that air local baseball and basketball games.

There are also significant expenses related to capital-gains taxes in the case of all-cash offers, compared with stock transactions - one reason why Rupert Murdoch, who owns 17% of Fox has leaned away from cash deals. Comcast said it would offer to buy the same assets after the spinoff of what has been dubbed "New Fox". "It also opens up doors to own an even richer content library to counter heavyweights such as Netflix", he said. According to Forbes, the former's offer could amount to about $60 billion. But the controlling family and shareholders would face pressure if the new offer is better than the one from Disney.

But observers think that AT&T likely won its arguments in court and will be allowed to acquire Time Warner. But if the government successfully shuts down the Time Warner merger, then Fox and Comcast probably won't be joining forces any time soon.

Fox declined to comment on Comcast's statement.

Daniel Ives of the research firm GBH Insights said he expected a pitched battled for "these golden entertainment assets of Fox" as traditional media groups gird for competition against streaming and tech firms.

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