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Comcast offers $65 billion to lure Fox from Disney bid

Reuters 

By O'Donnell and Liana B. Baker

(Reuters) - Corp offered $65 billion on Wednesday to lure Twenty-First Century Inc away from a merger with Co , setting up a bidding war between two of the largest U.S. companies with its 20 percent higher offer.

said he was highly confident regulators would allow to acquire most of Fox's assets after Inc's court victory on Tuesday, which allowed it to buy for $85 billion.

The fight to win Fox's assets is shaping up to be a summer blockbuster starring well-known moguls, led by who built into a global Comcast's Roberts, who led a failed bid for in 2004, now faces off against Robert Iger, whose own dealmaking has added heroes from Pixar, Star Wars and to the home of Mickey Mouse.

Fox's board will now have to decide whether Comcast's offer beats Disney's. If prefers Comcast, Disney will have five days to respond.

Comcast may have a tough time winning over Fox's largest shareholder, the Murdoch family. They own a 17-percent stake and would face a multi-billion dollar capital gains tax bill by accepting an all-cash offer from Comcast, tax experts previously told

Fox shareholders will vote July 10 on the Disney transaction but the company could postpone the meeting, Fox said in a statement.

Some analysts see difficulties for Comcast-Fox, which would add Fox's and television studios to Comcast's NBC Universal, but Roberts said in a letter to Fox that he would offer the same conditions as Disney and promised to fight for the deal in court if necessary.

Comcast is expected to lead a wave of traditional media companies trying to combine distribution and production to compete with and Alphabet Inc's The younger firms produce content, sell it online directly to consumers and often offer lucrative targeted advertising.

A merger between Fox and Comcast would create a company with a stable of well-known and franchises, such as the X-Men superheroes. A combined company would hold the rights to air Fox's long running TV show "The Simpsons", the U.S. rights to and League Soccer.

Fox's international assets such as appeal to both Disney and Comcast, which want to expand their global presence.

Major sports and assets including Fox News, Fox Network and Fox Sports would be spun off into a separate company.

Shares of Comcast, Fox and Disney were barely changed in after-hours trade.

Comcast in a statement outlined an offer that was similar to Disney's, including a commitment to the same divestitures. It said that it would go to court and fight if the Justice Department tried to block the deal.

Comcast offered $35 per Fox share for the media assets, compared with Disney's stock offer, worth $29.18 per share at the close of trade on Wednesday.

Comcast offered a $2.5 billion reverse termination fee if the deal did not go through, the same as Disney. It also offered to pay Fox's $1.525 billion breakup fee owed Disney, if Fox went with Comcast.

Comcast said it intended to pursue its $30 billion acquisition of in parallel with its Fox bid. Comcast bid for Sky in April, after Fox's bid for the remainder of European pay-TV group it did not already own was delayed by regulators.

Fox in a statement said it had received the proposal and would review it.

Justice Department lawyers who tried to stop AT&T's $85 billion deal expect consumers will lose out as bigger companies raise prices, and some lawyers saw that as a concern in a Comcast-Fox deal which would put two studios and two major television brands under one roof.

"One cannot ignore the fact that there's less independent content to go around," after the deal, said Henry Su, an antitrust expert with

Still, the court fight gave Comcast valuable information about how to structure a Fox deal, said David Scharf, a litigation expert with

Disney itself has "surgically" structured a transaction that "might be doable," avoiding and big Fox sports channels, U.S. said last week.

"I don't think either will have a significant advantage over the other," given that both Disney and Comcast seem motivated to divest what they need to win a deal with Fox, said Ketan Jhaveri, a former Justice Department who served on the

(Reporting O'Donnell and Liana B. Baker in New York; Additional reporting by Sheila Dang in New York; Diane Bartz in Washington; and Vibhuti Sharma and Arjun Panchadar in Bengaluru; Writing by Peter Henderson; Editing by Lisa Shumaker)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Thu, June 14 2018. 05:20 IST
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