Walt Disney Co. under pressure to respond to Comcast’s Fox bid. Both companies are seeking media consolidation with for 21st Century Fox Inc.’s entertainment assets
The battle of the giants rumbles on as Disney and Comcast go head to head for a cornucopia of media properties. Given the lucrative IPs range from The Simpsons to X Men, it’s easy to see why the prize is so high.
As Blooloop reported in May, Comcast confirmed it would top Disney’s $52.4 billion offer for the Fox assets. Now that bid has come in and it looks highly competitive.
The saga has been running for some time with the two companies battling to convince Fox investors that each is the most appealing partner.
“What it really comes down to is price and who wants it more,” says Paul Sweeney, an analyst at Bloomberg Intelligence.
Comcast is offering $35 a share, promising their bid represents a 19 percent premium over the Disney offer. They are also dangling cash as an appealing carrot, rather than Disney’s stock offer.
Media consolidation is the name of the game. Comcast was waiting for the outcome of AT&T’s antitrust battle to take over Time Warner Inc.. Once that was successful, the company jumped straight in with its bid.
It’s easy to see why Disney and Comcast are so keen to gain a slice of Fox. The winner will control a swathe of the Murdoch empire, including Fox’s movie and TV studios and television network FX, amongst others. It will also bring in multichannel providers such as Star India and Sky Plc.
With Wednesday’s bid, Brian Roberts CEO of Comcast is looking to disrupt Disney CEO Bob Iger’s desire to bolster his company’s already huge entertainment offering with the Fox properties.
Five days to a fresh bid, Fox considering Comcast offer
Disney has a right of refusal on any counteroffer. It now has five days grace before it needs to submit a fresh bid. However that deadline won’t start until the Fox board has had a chance to look at the Comcast offer and decide it is superior to Disney’s.
So far Disney has not commented. Fox has said it would “carefully review” Comcast’s unsolicited proposal.
The New Fox
The whole of Fox is not on offer and a new entity will be created – New Fox – which will include Fox News, the sports channels FS1 and FS2, and the Fox broadcasting channel. New Fox will be run by Lachlan Murdoch and is set to focus on domestic television, news and sports.
The new Fox approach splits up the Murdochs’ extensive holdings, in turn generating more value. Fox News alone is likely to add around $2 billion a year to the company’s bottom line. New Fox will also be home to Fox Business and local TV stations in nine of the ten largest metro areas in the USA.