£50bn battle for 21st Century Fox
Universal in dramatic bid to scupper Disney deal
THE owner of Universal Studios last night launched a £50bn bid for the bulk of Rupert Murdoch’s 21st Century Fox.
Comcast’s move followed a landmark court ruling in the US which effectively gave it the all- clear to mount a giant takeover offer.
It set the stage for an epic battle between the company and rival Disney, which has already struck a £39bn deal to buy Fox’s entertainment assets.
Comcast had tried to bid for Fox last year but was spurned by the Murdochs, partly due to fears such a deal would fall foul of competition regulators. But those concerns were swept away yesterday when a federal judge approved AT&T’s buyout of Time Warner – a deal seen as similar to Comcast’s proposal.
The deal between Disney and Fox was announced in December. It would see Murdoch’s company sell its film and television studios, National Geographic, a 30pc stake in video website Hulu and Fox’s stake in Britain’s Sky, whose hit shows include Westworld ( pictured).
But as they have been waiting for regulatory approval, Comcast has been previctorious paring its own counter- offer in the wings. It hopes to woo Fox shareholders with its bigger offer – with its move last night expected to spark a bidding war with Disney over some of Hollywood’s most prized assets.
Both companies are desperate to acquire Fox so they can build a war chest of television and film content to take on tech giants Netflix, Amazon and Apple. The rivals are the biggest media companies by revenue in the US.
Rich Greenfield, an analyst at New York-based BTIG, said: ‘For Comcast, this is a must-win. Fox is its only real shot for it to become a global company.’
But research firm Moffett Nathanson said: ‘ We continue to believe that Disney has the superior balance sheet, cost of debt, equity and rationale to emerge over Comcast in a bidding war.’
Last night Comcast put the final touches to its proposal after learning of the court ruling. The battle with Disney will also decide the fate of British broadcaster Sky, which is in the middle of a tug- of- war between Fox and Comcast. Fox has promised Sky to Disney if its offer is chosen.
Yesterday Fox shares surged 7pc higher as investors waited for Comcast to pounce. Disney was up 2pc while Comcast rose 3pc.
The battle over Fox was described by one analyst as ‘the last remaining transformational deal in media’. Daniel Ives, an analyst at GBH Insights, said: ‘This decision will have widereaching ramifications across the telecommunications, media and tech industry for decades to come.’
The takeover of Time Warner by AT&T had been challenged by the US Justice Department.
Officials argued the deal could cause prices to rise and urged the judge to block it or force AT&T to sell assets.
Yesterday’s decision will now make it much harder for the department to challenge similar deals in future.