As expected, Comcast Corporation (Nasdaq: CMCSA) officially placed a $65 billion all-cash bid for Twenty-First Century Fox ( FOXA) on Wednesday, valued at $35 per share. Wall Street’s focus now shifts to Walt Disney Co. ( DIS) as a potential bidding war for Fox unfolds.
The battle between Comcast and Disney over Fox started last November when Comcast made a $64 billion all-stock offer for the majority of Fox’s assets valued at roughly $34.41 per share. Fox rejected Comcast’s initial bid due to antitrust concerns.
In December, Disney placed its own all-stock bid for Fox valued at $52.4 billion, or $29.54 per share. Fox’s board accepted Disney’s deal, but Comcast says Wednesday that it has carefully crafted its new offer.
“We are pleased to present a new, all-cash proposal that fully addresses the board’s stated concerns with our prior proposal,” Comcast CEO Brian Roberts says in a letter to Fox’s board.
Comcast was emboldened to place its new bid for Fox after a judge unconditionally approved the $85 billion AT&T ( T) buyout of Time Warner ( TWX) on Tuesday.
Comcast, which is also in the process of acquiring U.K. media giant Sky for $31 billion, launched its Xfinity Instant TV streaming service in September. Adding Fox’s TV and movie studio content could provide a major shot in the arm for the new service, but Disney is unlikely to go down without a fight. Disney plans to launch its own streaming service in 2019, and some analysts expect the bidding war between Comcast and Disney to continue.
GBH Insights head of technology research Daniel Ives says the company that lands Fox will have a tremendous advantage.
“With Comcast already going after Sky assets in Europe, this [is] a logical and aggressive move for Comcast to go after these golden entertainment assets of Fox and would move Comcast to the forefront of the streaming game potentially over the coming years, in our opinion,” Ives says.
Ives says landing Fox would be a huge win for Comcast and losing Fox would be a major setback for Disney.
“In a nutshell, if Comcast won these assets from the arms of Disney it would be a devastating and hard to recover blow for Iger and Disney’s streaming ambitions going forward,” Ives says.
CMCSA stock has traded mostly flat this week but is down 19 percent year-to-date.
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Comcast Corporation (CMCSA) Fires Latest Shot In Fox Bidding War originally appeared on usnews.com
