The Department of Justice approved the Walt Disney Co (NYSE: DIS) $71.3 billion buyout offer for Twenty-First Century Fox ( FOXA) on Wednesday, but the Disney deal is far from a sure thing at this point.
Disney must still get the green light from international regulators, and analysts say Comcast Corp. ( CMCSA) is nowhere close to throwing in the towel on Fox.
The Justice Department said on Wednesday that the Disney deal to acquire Fox can go through as long as Disney agrees to divest 22 of Fox’s regional sports networks. Disney is expected to agree to the government’s terms, but it’s still too early for the Disney investors to celebrate.
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The Wall Street Journal reported on Wednesday that Comcast may take an outside-the-box approach to outbidding Disney by bringing a partner into the bidding war. A person familiar with the situation says Comcast is considering teaming up with a private equity investor or another partner and making a joint offer for Fox.
Theoretically, a joint bid could kill two birds with one stone for Comcast by splitting the cost of the deal and helping Comcast avoid antitrust concerns. The Journal described one potential scenario in which Comcast would acquire Fox’s international assets, while a strategic partner would acquire its U.S. assets.
GBH Insights head of technology research Daniel Ives says the Department of Justice ruling simply turns up the heat on Comcast.
“The regulatory approval is another step forward and puts more pressure on Comcast to come back with a competing offer, as [Disney CEO Bob] Iger can now almost grasp these key content assets, which are vital to propelling Disney’s streaming ambitions for the coming years,” Ives says.
Ives says Comcast is very motivated to take an aggressive approach to acquiring these critical Fox assets.
“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 over the coming years, in our opinion,” Ives says.
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Comcast is certainly under no immediate time-related pressure to outbid Disney. Fox recently postponed its original shareholder meeting scheduled for July 10 to vote on the Disney deal, presumably to allow more time for the bidding war between Comcast and Disney to play out.
GBH Insights has a “highly attractive” rating and $120 price target for DIS stock.
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Walt Disney Co (DIS) Deal With Fox Isn’t Final Yet originally appeared on usnews.com
