Comcast® Could Bid to Acquire Media Assets of 21st Century Fox

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Acquiring Media Assets

If the US government sanctions the acquisition of Time Warner® by the fastest internet provider AT&T®, Comcast® could make a $60 billion bid to acquire the media assets of 21st Century Fox. If Comcast’s bid is to go through, it will top Walt Disney’s $52.4 billion bid for Fox’s media assets. This move from the cable giant comes in the wake of their proposal to acquire Sky plc, for which Walt Disney and 21st Century Fox is also bidding. If a bidding war is to happen between the two companies, Comcast’s plans to acquire the Pay-TV broadcaster might cost them around $100 billion.

As per sources close to the deal, Comcast® has sought financial assistance from investment banks as part of Sky plc bid, and now they are asking banks to increase the amount to finance for the 21st Century Fox bid. For the all-cash bid to go through, the government has to approve the AT&T®-Time Warner® deal.

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On the occasion of Comcast’s previous earnings call, their Chief Financial Officer Michael Cavanaugh said, “Regarding potential acquisitions, it is our job to continuously evaluate whether there are opportunities for us to create value. But should we pursue anything while our stock is at these levels, while circumstances can always change, I think it is unlikely that we would use Comcast® shares as a medium of exchange for a transaction.”

Comcast® earlier hyped that since their stock value is strong, the Chief Executive Officer of 21st Century Fox Rupert Murdoch will favor their bid to acquire Fox’s media assets. However, since Walt Disney’s bid, the shares of Comcast® have diminished by around 15 percent. Henceforth, the cable operator feels an all-cash bid will keep them in a better stead to acquire 21st Century Fox, even if Rupert Murdoch favors the shares of Walt Disney.

Comcast® feels Walt Disney might not be able to top their all-cash bid, because if the media conglomerate adds further stock for that, the stock of 21st Century Fox will diminish, which will also affect the value of Disney’s offer. Reports also indicate that Comcast® was contacting investment banks to increase the presently granted bridge finance for the Sky plc bid, as their bid for 21st Century Fox’s media assets is an all-cash one. There are other factors, that may influence the probable deal, including a probable bidding war for Sky plc and the approval of AT&T®-Time Warner® deal.

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