Comcast Corp to top Walt Disney's $50b offer for 21st Century Fox

Comcast Corp to top Walt Disney's $50b offer for 21st Century Fox
Photo credit: 21st Century Fox

Comcast Corp has confirmed for the first time it is preparing a higher, all-cash offer for the businesses that Twenty-First Century Fox has agreed to sell to Walt Disney Co.

While the US cable operator says it is still considering its position, it says it is in advanced stages of readying an offer that would be "superior" and "at a premium" to Disney's all-stock offer.

"While no final decision has been made, at this point the work to finance the all-cash offer and make the key regulatory filings is well advanced," Comcast said on Wednesday.

Sources familiar with the deal told Reuters at the start of May that Comcast was preparing bridge financing for a cash offer for the Fox assets, but Wednesday's statement is the first formal confirmation by the company it is ready to move.

The same sources said Comcast chief executive Brian Roberts will only proceed with a bid if a federal judge next month allows AT&T's planned $US85 billion (NZ$123b) acquisition of Time Warner to proceed.

Disney in December offered stock then worth $US52.4 billion (NZ$79.5b) to buy Fox's film, television and international businesses as it bids to beef up its offering against streaming rivals Netflix and Amazon.com.

Disney shares have fallen nearly 3.3 percent since, reducing the value of the offer to just over $US50 billion (NZ$7.5b).

"It all depends on the AT&T and Time Warner deal," said Brian Weiser, analyst at Pivotal Research. "If that goes through it is highly possible there will more than one bid for Fox."

Fox and Disney were not immediately available for comment.

Comcast, owner of NBC and Universal Pictures, has also made a GBP22 billion offer to acquire the 61 percent stake in European pay-TV group Sky Plc that Fox does not already own. In doing so, it topped an earlier offer for the entirety of Sky by Fox.

A regulatory filing in April showed Comcast offered to acquire most of Fox's assets in an all-stock deal valued at $US34.41 (NZ$49.90) per share, or $US64 billion (NZ$92.8b) last November, just before Disney's offer was agreed.

After a sale, Fox's remaining assets will include Fox News, Fox Business Network and sports cable networks.

"I think Fox, or its controlling shareholder and board of directors, has already expressed their preference - Disney, even though Comcast allegedly offered a higher consideration already," said Jeffrey Logsdon, an analyst with JBL Advisors in California.

"Comcast does seem intent on winning this one [and] rivalry can frequently drive prices to uneconomic levels."

Reuters