Disney Has Competition for Fox

Posted by Bret on 06/13/18 at 05:18 PM Category: Disney

As expected, Comcast has made a competing bid for assets of 21st Century Fox, in an attempt to snatch the company from Disney, who had already made a $52.4 billion all-stock offer.

The bid, announced Wednesday, represents a 19 percent premium to Disney's offer. Comcast, the parent of CNBC, offered $35 a share in cash.

A Comcast-Fox merger would look different from a Disney-Fox merger, as each suitor would be looking for different assets owned by Fox, and for different strategic reasons. A Disney buyout was looking like it wouldn't undergo government scrutiny, while Comcast held off until the AT&T decision was reached because a Comcast buyout was more similar in structure to the AT&T deal. Disney may make a counter offer, possibly increasing the value, and/or converting part of the offer from stock to cash.

During their case AT&T argued that their move to buy Time Warner was not in violation of antitrust laws, and in fact was necessary for them to remain competitive with other companies that already have a grip on distribution assets and content production. Companies cited by AT&T were Facebook, Apple, Amazon, Netflix, and Google (known as the collective acronym FAANG). Now that AT&T will have similar assets, other media and communications companies will be using this precedent to move forward to step up and compete. A Comcast-Fox merger would be on part with this. A Disney-Fox merger would look slightly different, which is why it wasn't in as much danger of being blocked by the Justice Department.

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