Setback for Comcast as Disney sweetens Fox offer to $71.3 bn

The $38-a-share price is about $10 a share higher than what Disney proposed in December – and $3 above Comcast’s bid from last week. Fox has accepted the offer

Walt Disney raised its offer for 21st Century Fox’s entertainment assets to $71.3 billion, outbidding Comcast in a battle for one of the media industry’s biggest prizes.

The $38-a-share price is about $10 a share higher than what Disney proposed in December – and $3 above Comcast’s bid from last week. Fox has accepted the offer, saying it provides more flexibility and other enhancements than the $65 billion Comcast deal. Still, the opportunity remains for the cable giant to return with sweetened terms.

At stake is a trove of media properties, ranging from “The Simpsons” to “X-Men”, that may help fend off the threat from Netflix and other streaming upstarts. Both Disney and Comcast are looking to use the Fox assets to bolster their content and expand overseas. Disney’s latest offer is a “very aggressive move” by Chief Executive Officer Bob Iger and may make it difficult for Comcast to respond, said Bloomberg Intelligence analyst Paul Sweeney. Comcast’s current bid was already poised to load the company up with debt, and its shares have fallen 18 per cent this year.

“Comcast’s balance sheet may preclude it from bidding much higher,” Sweeney said. “Further hampering Comcast’s ability to respond is its position that it does not want to use its stock in a deal at these low levels.”

Fox shares jumped as much as 6.8 per cent on Wednesday, sending them to a record high. Disney rose about 0.6 per cent as of 9:56 a.m. in New York, while shares of Comcast were little changed.

The tussle follows AT&T’s victory over the US Justice Department in its antitrust battle to take over Time Warner. That outcome is expected to spur a wave of media consolidation, emboldening companies to get more aggressive with deals.