Comcast dropping out of Twenty-First Century Fox bidding war

Comcast dropping out of Twenty-First Century Fox bidding war

Darren Sullivan
July 20, 2018

The central battle for 21st Century Fox assets ended on Thursday when Comcast dropped its bid, ceding the prize to Walt Disney. Comcast last week raised its bid for Sky, topping a previous offer made by 21st Century Fox. The announcement Thursday leaves the path open for The Walt Disney Co.to buy the Twenty-First Century Fox assets with its $71 billion offer.

"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".

It means that Rupert Murdoch's 21st Century Fox has failed in its bid to take full control of Sky. Both Comcast and Disney had been coveting the prized assets being sold by Murdoch, which include the Fox studios in Hollywood and important film and television production operations.

Comcast came along in June with a higher offer ($65 billion) for the same assets, which just so happens to include those high-profile Marvel characters that the Disney-based Marvel Cinematic Universe would love to get its hands on.

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

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While an acquisition of Britain's Sky, a broadcaster of sports, films and TV shows to 23 million homes across Europe, would significantly diversify Comcast's business overseas, it would do little to give it scale in its core US market.

Fox now owns a 39 percent stake in Sky and has valued the remaining 61 percent of the company at $32.5 billion while Comcast has upped its offer to $34 billion for that stake.

Are you excited for Disney to finally acquire Fox? As we reported previously, Sky is only 39% owned by Fox, with 61% of the company potentially not included in this deal.

Indeed, Comcast stock was up 2.8 percent in pre-market trading to about $35 a share. "I don't think Disney wants to give up Sky", said Crispin Odey, whose eponymous hedge fund owns Sky shares. Lions Gate Entertainment Corp LGFa.N rose 5.2 percent on investor speculation it could become an acquisition target. The department filed its appeal against U.S. District Judge Richard Leon's decision to OK the $85.4 billion merger last week, despite Leon stating he didn't believe the government had "a likelihood of success" on merit of appeal.