The Strategist

Comcast is aiming at Fox… once again

02/12/2018 - 13:29

Comcast Corp. returned to t consideration of the purchase of part of the 21st Century Fox assets. Earlier, the cable operator left the negotiations after Fox rejected its offer of $ 60 billion. After that, Rupert Murdoch's corporation agreed to sell its assets to Walt Disney, while the amount of the deal could be 15% less than the one offered by Comcast.

According to sources, the choice of a potential buyer was influenced by attractiveness of Walt Disney’s shares, which were more preferable for Fox shareholders. In addition, Mr. Murdoch's company decided to abstain from the deal with Comcast because of possible problems with obtaining approval of US antitrust regulators.

According to sources from The Wall Street Journal, now the cable operator is waiting for the publication of the details of the deal between Fox and Walt Disney in order to understand, on the basis of what Fox has accepted the less profitable proposition from a financial point of view. If the operator's management concludes that it still has the chances of making this deal, Comcast will once again cut into the struggle for Fox assets.

The decision to conclude a deal with Disney was taken by Rupert Murdoch, whose family controls 39% of the shares. However, the family owns only 17% of the shares in circulation. Thus, it is likely that a new proposal from Comcast can cause a sufficient number of shareholders to vote against Murdoch's decision.

It is known that in 2017, representatives of Comcast informed Murdoch that they could offer more money for assets than Disney, but he decided not to respond to their offer.

International business Fox is of special interest to Comcast, as the company sees more potential in the development abroad. It is noted that representatives of Comcast and Fox declined to comment. Recall, Disney company reported about the purchase of assets of 21st Century Fox in December 2017; according to available information, the transaction amount should be $ 52.4 billion.

If the deal takes place, Comcast or Disney will receive Fox's film studio and television station, international assets of the company, such as Star and Sky, and the FX and National Geographic networks. At the same time, Fox will retain control over its local broadcasting subsidiaries. Currently, the total active Fox is estimated at $ 50 billion. Thus, the buyout of the company's core capacity is likely to exceed $ 35 billion.

The US position on several alleged mergers from media conglomerates is contradictory. The US Department of Justice is preparing to sue AT & T, which is going to buy Time Warner for $ 86 billion. In 2015, the company acquired DirecTV for $ 48.5 billion, becoming the country's largest pay-TV provider. On the contrary, on November 16, the US Federal Communications Commission voted to remove legal obstacles that prevent media companies from creating organizations close to monopolies at the regional level. Voting is directly related to the desire of the conservative Sinclair television company to consolidate local television and newspaper markets by acquiring Tribune Media for $ 3.9 billion.