Comcast Plans to Oubid Disney for Fox

Sean Reid
May 9, 2018

Comcast Corporation is gathering resources for an all-cash offer up to $60 billion for 21st Century Fox's media assets despite a $52b all-stock deal already in place with the Walt Disney Company, according to Reuters.

While Comcast's shares have fallen since Disney announced its bid for 21st Century Fox, the cable company believes that it has a better chance with an all-cash bid, even if Rupert Murdoch prefers Disney's shares. That decision is expected in June from U.S. Disctric Court Judge Richard Leon.

News agency Reuters reported that Comcast Corp (NASDAQ:CMCSA) is seeking finance so it can top the Disney bid for various media assets of Twenty-First Century Fox Inc (NASDAQ:FOXA). In doing so, it topped an earlier offer for the entirety of Sky by Fox. In fact, the broadcasting conglomerate pushed a more generous deal than Disney.

Fox shares rose 5.13 percent to $39.99 on the news in after-hours trading in NY on Monday.

It looks like Disney's big plan to buy a significant part of Fox's assets is not a sure thing. "If they acquire both and remain integrated, it would change our thesis (Cable would be less than 50% of the value); however, it would be hard not to be excited about a phenomenal Cable asset coupled with a global content powerhouse, trading at 9x FCF". This mirrors Comcast ongoing attempt to outbid Fox for the park of Sky that they do not own. Should Comcast's latest deal - an all cash offer - go through, however, it appears any hopes fans had of seeing the X-Men and Fantastic Four in the Marvel Cinematic Universe may simply be a pipe dream. The Roberts family controls Comcast through a dual-class stock structure.

In addition, Comcast is racing to get speedy regulatory approval in the United Kingdom for their bid for Sky.

Shares of Fox were last up 2.2 percent at $38.86.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. It is not a solicitation to make any exchange in commodities, securities or other financial instruments.

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