£50bn bat­tle for 21st Cen­tury Fox

Univer­sal in dra­matic bid to scup­per Dis­ney deal

Daily Mail - - City & Finance - by Matt Oliver

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.

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