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Fox confirms Comcast offer

21st Century Fox has confirmed it has received an “unsolicited, written proposal” from Comcast to acquire the assets it has agreed to sell to Disney for US$65bn.

Rupert Murdoch

Comcast, owner of NBCUniversal, had earlier released a statement outlining its “superior all-cash proposal,” which valued Fox’s shares at US$35 – 19% more than the value of Disney’s offer.

Media analysts had predicted Comcast was going to make a new offer topping Disney’s US$52.4bn stock deal for Fox’s assets including its film and TV studios, US cable networks and international channels.

That followed a federal ruling that cleared telecoms giant AT&T to complete its US$85bn takeover of Time Warner on Tuesday.

Comcast confirmed last month it was intending to trump Disney’s offer and was waiting to see the outcome of the AT&T anticompetition case before it proceeded.

In a letter to Fox’s owners – Rupert Murdoch and his sons Lachlan and James – Comcast’s chairman and CEO Brian Roberts wrote that his firm was “disappointed when 21st Century Fox decided to enter into a transaction with The Walt Disney Company, even though we had offered a meaningfully higher price.”

He added: “We are highly confident in our ability to finance the transaction, and our offer includes no financing-related conditions. We are also highly confident that our proposed transaction will obtain all necessary regulatory approvals in a timely manner and that our transaction is as or more likely to receive regulatory approval than the Disney transaction.

“Accordingly, we are offering the same regulatory commitments as the ones 21st Century Fox has already obtained from Disney, including the same US$2.5bn reverse termination fee agreed to by Disney.”

Comcast also agreed to reimburse the US$1.525bn break-up fee to be paid by Fox to Disney “in the highly unlikely scenario that our transaction does not close because we fail to obtain all necessary regulatory approvals.”

In its written response, Fox was quick to point out it “remains subject” to the Disney merger agreement but said it “will carefully review and consider the Comcast proposal.”

Fox added it was yet to make a decision on whether to “postpone or adjourn” its planned special meeting of stockholders to consider proposals related to the Disney merger.

Besides its offer for Fox, Comcast is in competition with the Murdochs for the remaining 61% of European satcaster Sky that Fox doesn’t own. Analyst Mary Ann Halford suggested yesterday the AT&T ruling could impact the outcome of the bidding war.

With European Union regulators likely to approve Comcast’s proposed US$31bn bid, after the UK government gave the deal the green light last week, Halford believes 21st Century Fox’s longstanding offer might now look less attractive.

“It is likely that the EU will OK Comcast buying Sky. This will then lead the Sky board to recommend a Comcast-Sky deal go forward. However, will Disney then make a counter for Sky independently? Will Fox increase its offer to match Comcast’s with the expectation that Disney will compensate it for the increased price? Fox will need to sell Sky News, which seems like a lot of work,” Halford said, noting the UK government’s stipulation that Fox must dispense with Sky News for its takeover to go ahead.

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