Comcast® to Bid Again for 21st Century Fox’s Media Assets with Breakup Fee

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As per reports, Comcast® promises to pay $2.5 billion as breakup fee if regulatory hurdles block their plans to acquire media assets of 21st Century Fox. In fact, this fee was not included when Comcast® first approached for stakes in Rupert Murdoch’s media empire earlier. Now, Walt Disney also joins the cable giant in a race to acquire a percentage of Fox’s media assets.

It is reported that Fox rejected the initial offer of the cable provider, as that did not include a breakup fee. The inclusion of the fee is a new addition to all the talks in media regarding who holds an upper hand in the bidding process, out of Comcast® and the media conglomerate. As per a regulatory filing by 21st Century Fox, Walt Disney had included $2.5 billion as breakup fee in their bid and Fox’s board of directors have recommended that.

At the same time, Comcast® has made a separate bid for Sky plc, and that only goes to invite other financial decisions for the fastest internet provider. As the cable giant is bidding for stakes in Sky plc as well, it has sought $60 billion as bridge finance from the US investor banks to cover up for the all-cash bid. Other than the cable operator, even 21st Century Fox and Walt Disney are bidding for stakes in Sky plc.

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The final call on whether Comcast® will make a new all-cash bid for the pay-TV broadcaster depends on the approval of AT&T®-Time Warner® deal, which has been challenged by the Department of Justice. In fact, many of Washington’s antitrust experts who are following the AT&T®-Time Warner® deal feels that it will likely get approved, as vertical mergers are seldom challenged in court.

What are the odds of the Telco giant acquiring the media company? Since there were instances in the past, when the Justice Department had challenged a merger between two businesses that operate in different sectors and had failed to defend their case, the AT&T®-Time Warner® deal could go through. Yet again, as Comcast® has business divisions that may overlap with 21st Century Fox upon the approval of a deal between the two firms that own a movie studio and cable channels, the US regulators may scrutinize the deal, even as AT&T’s acquisition of Time Warner® clears the regulatory hurdles.

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