Comcast drops out of bidding war for Fox, clearing path for Disney
Comcast is abandoning its contest with the Walt Disney Co. to acquire a collection of 21st Century Fox assets including the Fox movie and TV studios and stake in streaming service Hulu.
Over the last two months, Comcast has countered Disney in a bidding war for Fox’s assets, which both companies consider crucial to a growing battle for entertainment, news and sports content delivered over the internet, as well as traditional pay-TV systems on cable, satellite and fiber.
Fox Executive Chairman Rupert Murdoch, who – along with sons Lachlan and James, control Fox – has said the family plans to refocus a smaller Fox on news and sports programming.
Comcast’s exit paves an open path to Disney’s acquisition of the Fox assets, which include its FX and National Geographic channels, 22 regional sports networks, as well as its 30 percent share of streaming service Hulu and 39 percent stake in U.K.-based pay-TV and broadband provider Sky.
Disney and Fox shareholders are scheduled to vote July 27 on the deal, and Fox’s board has suggested shareholders approve the Disney sale.
That recommendation hadn’t slowed the Philadelphia-based internet and cable heavyweight. Comcast last month trumped Disney’s original $52.4 billion offer for the Fox assets made in December with its own allcash offer of $65 billion, about a 20 percent premium to Disney’s original bid. Then, Disney on June 20 countered with a $70.4 billion bid of cash and stock.
Still, many Wall Street analysts expected Comcast to respond. But Comcast CEO Brian Roberts decided to withdraw, he said Thursday.
“I’d like to congratulate (Disney CEO) Bob Iger and the team at Disney and commend the Murdoch family and Fox for creating such a desirable and respected company,” Roberts said in a statement.
Instead, Comcast will focus on acquiring U.K.-based pay-TV and broadband provider Sky, Roberts says. Prior to putting its selected assets up for sale, Fox had been seeking to buy the 61 percent of Sky it does not already own.
Comcast made its bid for Fox a day after a federal judge approved AT&T’s $85 billion acquisition of Time Warner, as many experts saw that as sign of a lightening in regulatory scrutiny of media company mergers and acquisitions.
Subsequently, the Fox board said a deal with Comcast would carry “higher regulatory risk” than one with Disney. Last week, the Justice Department said it would appeal the AT&T-Time Warner decision.
As for Disney, its deal for the Fox assets was approved in the U.S. by the Justice Department, provided it sells Fox’s 22 regional sports networks.