Comcast offers $65 bn for Fox assets, topping Disney offer

AT&T-Time Warner Merger Gets The Green Light From Federal Court

Here’s why the AT&T-Time Warner merger just got approved

(FOXA.O), topping a previous proposal by Walt Disney Co. Even worse for the company, Disney's bid is said to be all-stock, which means that if the shares fall as a result of the court's decision, Disney's bid may be even less attractive.

AT&T Inc won approval from a United States court on Tuesday to buy Time Warner Inc for $85 billion, without conditions, allowing AT&T to compete with internet companies that dominate digital advertising and providing new sources of revenue.

The outcome, which has allayed fears among many companies that such deals would be blocked, is expected to spark a flurry of consolidation in the media industry, as companies battle the growing threat from technology companies. That would cover the Fox movie and TV studios, plus its share of Hulu, the FX cable networks and about $13 billion in debt, and is separate from Comcast's competing bid (against Fox) to acquire United Kingdom pay-TV giant Sky.

What's next? Well, Disney is expected to match Comcast's bid.

The move follows a previous bid being rebuffed a year ago.

While Wall Street fears a bidding war, one scenario is that the companies carve up Fox, with Comcast getting Sky as well as video streaming service Hulu and perhaps other assets.

Comcast was "disappointed when [21st Century Fox] made a decision to enter into a transaction with The Walt Disney Company, even though we had offered a meaningfully higher price", Roberts wrote.

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The firm's promises include a $2.5bn fee for Fox if it decides against the takeover.

It said it remains subject to the terms of its deal with Disney, a stock transaction valued at $52.4bn, or more than $66bn including debt, when it was announced in December.

However, part of the appeal of the Disney deal to the Murdoch family was its ability to make them influential Disney shareholders, with 21st Century Fox Chief Executive James Murdoch (son of Executive Chairman Rupert Murdoch) potentially inheriting a high position at Disney if the deal is completed. The cable provider planned to approach Fox investors and has told the Justice Department of its interest, an early step in addressing potential antitrust concerns, according to a person familiar with the matter. Major cable, satellite and phone companies are bulking up with purchases of entertainment conglomerates to compete against rivals such as Amazon and Google.

The Fox stable includes The Simpsons and the X-Men movie franchise. With Fox, Comcast would expand a portfolio that already includes USA television rights to the Olympics and comedy offerings such as "Saturday Night Live".

Since AT&T's vertical merger got the all-clear from the courts, it seems unlikely that Comcast's bid will be challenged by a newly chastened US Justice Department.

Comcast also is making an ambitious push in Europe that centers on United Kingdom pay TV provider Sky. In more recent times, sources claimed Comcast was putting together a $60 billion bid. The company's board will need to determine whether Comcast's offer is reasonably likely to be better than Disney's. Its shares were down 19 per cent through Tuesday. Comcast was a cable television operator that bought NBCUniversal several years ago, becoming a vertically integrated behemoth.

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