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Comcast offers $65 billion to lure Fox from Disney bid


By Sheila Dang and Diane Bartz

(Reuters) - Corp offered $65 billion on Wednesday to lure Twenty-First Century Inc away from a merger with , saying its all-cash bid was about 19 percent higher and launching the first salvo in what could be a bidding war between two of the largest U.S. companies.

said he was highly confident regulators would allow a Comcast-deal after Inc's court victory on Tuesday, which allowed it to buy Inc for $85 billion.

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

is expected to lead a wave of traditional 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.

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 agree to litigate any action taken by the Justice Department to block the deal.

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

Comcast also 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.

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

"Any deal that's coming down the pike that's not baked yet knows the government's playbook. They know what the government is concerned about," he said. "They can learn how to structure a deal to make it more palatable."

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

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

Craig Moffett, an with MoffettNathanson, said in a research note that Disney could prevail for other reasons.

"Disney has the superior balance sheet, cost of debt, equity and rationale to emerge victorious over Comcast in a bidding war," Moffett said.

(Reporting by in New York and in Washington; Additional reporting by in Bengaluru and Carl O'Donnell in New York; Writing by Peter Henderson; Editing by and Lisa Shumaker)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, June 14 2018. 03:04 IST