Comcast surrenders to Disney in Fox bid, to keep pursuing Sky
LOS ANGELES/NEW YORK: Comcast Corp. will no longer seek to compete with Walt Disney Co.’s for a swath of 21st Century Fox Inc.’s entertainment assets, choosing to focus instead on winning control of the Sky Plc satellite service.
The decision allows Disney to go ahead with its offer of $71.3 billion for Fox’s entertainment properties, which include a 39% stake in Sky. Comcast has offered about $25 billion for the UK pay-TV provider, including Fox’s stake, though it’s unclear if Disney will be willing to part with it.
While Comcast is dropping its pursuit of much of Rupert Murdoch’s empire, it did force Disney to pay a higher price for the assets, which also include a movie studio and cable networks FX and National Geographic. Comcast had made a $65 billion offer for Fox’s entertainment assets, forcing the Disney to sweeten its $52.4 billion deal.
Comcast shares jumped 2.5% to $34.86 in early US trading, a sign investors are relieved the bidding war over Fox assets is over. Fox dropped 1.2% and Disney gained 1.5%.
Last month, Disney won US antitrust approval for its purchase of Fox’s assets, giving it a potential edge in the contest. Comcast had weighed whether to team up with private equity investors in its pursuit of Fox assets, a person familiar with the situation said. Like Disney, Comcast would have had to take on an intimidating debt load to finance the deal. After Disney’s latest bid, Moody’s threatened to cut its credit rating.