Is Comcast Preparing To Make Unsolicited Offer For Fox?

Fox hunt heats up as Comcast prepares to duel with Disney over Rupert Murdoch's company

Fox stock jumps after report that Comcast is preparing to battle Disney for megadeal

Comcast has sought to block Walt Disney Co.'s acquisition of Twenty-First Century Fox Inc. with an all cash-bid, according to Reuters.

At the end of past year, Walt Disney announced that it would be acquiring Fox - for a cool $52.4 billion (£39 billion), no less, making it a pretty big deal. If a judge allows AT&T's deal with Time Warner to go through, Comcast will make its move for the Fox assets, Reuters reported, based on anonymous sources. Comcast is looking to its financial partners behind the Sky offer to increase the bridge financing facility it has already set up for that offer by at least $60 billion in hopes that an all cash offer will help them outbid Walt Disney Studios. In doing so, it topped an earlier offer for the entirety of Sky by Fox.

Some analysts believe Comcast would have to suspend its share buyback program entirely if it was able to snatch Fox from Disney's jaws, although its dividend appears safe for now.

Disney shares fell 1 percent in morning trade in NY, while Comcast's dipped 3.5 percent to $31.25.

Rupert Murdoch, who owns a almost 17-per cent stake in Fox and holds about 40 per cent of the voting power, prefers to be paid in stock rather than cash for the Fox assets, since an all-stock offer will not be taxable for shareholders, Reuters said.

The news comes as both Disney and Fox are preparing to release quarterly earnings reports this week.

It looks like Disney's big plan to buy a significant part of Fox's assets is not a sure thing. Murdoch was concerned about the reaction of Washington regulators to a deal with Comcast.

Shares in Sky were down 1.5% at 1,352p in mid-morning trading.

Comcast's stock has dropped since then, from around $38 to about $32 now, giving the company a market capitalization of $149 billion.

"At the margin, the news may be seen as negative for investor sentiment on Sky as it may limit Comcast's ability to counter-bid should Fox raise its offer for Sky", UBS said.

Latest News