Media shares rise on AT&T ruling

Bengaluru, June 13: 21st Century Fox’s shares rose 8 per cent on Wednesday as an approval for AT&T’s buyout of Time Warner spurred speculation that Comcast would proceed with an offer for most of the media company’s assets.

Comcast’s proposal, widely expected later in the day, will upend Fox’s $52 billion allstock deal to be bought by Walt Disney.

A federal judge on Tuesday approved AT&T Inc’s $85 billion buyout of Time Warner, clearing the path for more such deals in a changing media industry.

Shares of other telecom and media companies such as Sprint, CBS and Discovery were all up around 4 per cent in premarket trading. Time Warner rose about 5 per cent.

“The implications of the ruling are more relevant for other potential vertical deals,” Simon Flannery, analyst at Morgan Stanley said.

AT&T’s stock, however, was down nearly 4 percent, with at least one analyst raising concerns about the debt the company would absorb as part of the deal.

“Time Warner will be a positive for AT&T’s income statement, at least initially. But it will be a negative for the balance sheet,” said research firm Moffett Nathanson’s Craig Moffett, who downgraded the stock to “sell”.

“The new AT&T will carry an astounding $249 billion of debt.”