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Disney tipped to win Fox race

Disney CEO Bob Iger (left) and Fox boss Rupert Murdoch

Disney is likely to beat Comcast in the battle to secure a slew of assets from 21st Century Fox, according to US analysts, who are expecting a counter-offer from the cable giant that will continue an “unbelievable bidding war.”

The Mouse House initially offered US$52.4bn for the package, which includes Fox’s US cablenets and stakes in European satcaster Sky and production giant Endemol Shine Group, in December last year.

However, US media giant Comcast tabled a US$65m counter-offer last week, leading to yesterday’s US$71bn bid from Disney valuing Fox shares at US$38 apiece.

Media analysts expect the bidding war to continue, with UBS’s John Hodulik saying his firm “believe another counter-offer from Comcast for Fox is likely.”

“This is just the beginning of what’s going to be an unbelievable bidding war,” Porter Bibb, managing partner at Mediatech Capital Partners, told CNBC.

Ivan Deryugin, analyst at United First Partners, said any counter-bid by Comcast “would likely be limited at US$42 a share in cash, given the limits on debt that the cable giant could assume,” while Hodulink claimed the cabler could rise to US$45 per share.

Michael Nathanson of analyst MoffettNathanson added: “Before, the only outstanding question was whether Disney’s board and management would go to the mat on this transaction. We now know the answer is clearly yes.

“As we have said before, we feel confident that this process continues to be very good news for Fox shareholders,” he added, arguing that Disney held most of the chips in the battle.

Nathanson said the Mouse House had a better balance sheet and was more likely to pass regulatory hurdles.

Larry Haverty, MD at US-based LJH Investment Advisors, told CNBC he also believed Disney would win the battle, adding that it was “the favourite in the horse race” because it had the right “tools” at its disposal to win the bidding war.

A special meeting of Fox stakeholders to consider the original bid had been scheduled for July 10, but this has now been put back to allow more time to consider the revised proposal and potentially a counter-bid from Comcast.

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