Comcast Readies Fox War Chest -- WSJ
May 08 2018 - 3:02AM
Dow Jones News
Firm lines up financing for hostile bid for assets but hasn't
decided to go ahead
By Amol Sharma
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (May 8, 2018).
Cable giant Comcast Corp. is getting the pieces in place to make
a hostile bid for 21st Century Fox's entertainment assets should it
choose to do so, according to people familiar with the
situation.
Fox agreed in December to sell the assets in question to Walt
Disney Co. for $52.4 billion in stock.
Comcast is considering making a play to break up that deal, and
has lined up around $60 billion in financing to make an all-cash
offer for the Fox assets, the people say.
Comcast hasn't yet decided whether to proceed with a hostile
bid. One pivotal factor is the outcome of the government's lawsuit
to stop the pending merger of AT&T Inc. and Time Warner Inc. If
the companies are successful and their deal survives, Comcast would
be emboldened to pursue the Fox assets, the people said.
Arguments in the antitrust case against the deal concluded last
week, with the judge saying he would announce his ruling on June
12.
The assets Comcast and Disney are seeking to purchase include
the Twentieth Century Fox TV and film studio, cable networks and
international properties including Fox's 39% stake in European pay
TV operator Sky PLC.
Separately, on another track, Comcast and Fox are each vying for
full control of Sky and have lobbed in bids. Comcast is securing
financing from banks that would allow it to pursue a bid for the
Fox entertainment assets and consolidate 100% ownership of Sky, the
people familiar with the situation said.
Reuters earlier reported that Comcast was asking banks to
arrange financing that would give it the ability to pursue an
all-cash bid for the Fox assets.
Comcast has circled the Fox assets for months. Fox, citing
regulatory concerns, turned down a Comcast stock offer in the low
$60 billion range before sealing the Disney deal, people familiar
with the matter have said. Comcast's offer was a 16% premium to
Disney's, according to a securities filing and people close to the
deal talks.
It is possible Comcast could bid a bit lower than last time if
it pursues a hostile effort, one of the people familiar with the
situation said. The cable company believes an all-cash offer would
be compelling to most Fox shareholders.
One concern raised from the Fox side during the last round of
deliberations was the relative value of Comcast shares versus
Disney shares, so an all-cash bid would take that off the table,
the person said.
Comcast shares have been under pressure in recent months. The
cable company's chief financial officer, Michael Cavanagh, said on
an earnings call late last month that Comcast was unlikely to use
its stock to make deals. He said the company's strong balance sheet
will give it flexibility to consider opportunities "at times like
this."
21st Century Fox and Wall Street Journal-parent News Corp share
common ownership.
(END) Dow Jones Newswires
May 08, 2018 02:47 ET (06:47 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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