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Fox, media firms rise after AT&T-Time Warner approval


(Reuters) - Twenty First Century Fox Inc's shares rose 8 percent to a record-high on Wednesday as approval for AT&T's buyout of Inc spurred speculation that Corp would proceed with an offer for most of the company's assets.

A firm offer from Comcast, widely expected later in the day, could upend Fox's $52 billion all-stock deal to be bought by

A on Tuesday approved Inc's $85 billion buyout of Time Warner, rebuffing an attempt by U.S. to block the takeover and potentially clearing the path for more such deals in a rapidly changing industry.

Shares of other telecom and companies such as Sprint Corp, and were all up between 1.5 percent and 3 percent in early trading. rose about 4 percent, while Disney was up 2 percent.

"The decision ... may be interpreted as indicative of the general tone in (and at the DOJ) towards large-scale vertical mergers," analysts said in a note to clients.

Craig Moffett, an with Moffett Nathanson, said Richard Leon's opinion will be seen as a green light for to bid for Rupert Murdoch's Fox, but tipped Disney as the potential winner in a bidding war.

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

Comcast said in May it was in advanced stages of preparing a higher all cash offer for Fox's assets but did not indicate the value of its bid. reported last November that both Comcast and had expressed interest in buying Fox's assets.

The move by media companies to consolidate highlights the threat from such as and Alphabet Inc's Google, which sell directly to consumers, without requiring a pricey cable subscription.

AT&T's stock, however, was down nearly 5 percent, with Moffett raising concerns about the debt the company would absorb as part of the deal.

"will be a positive for AT&T's income statement, at least initially. But it will be a negative for the balance sheet," said research firm Moffett, who downgraded the stock to "sell".

"The new will carry an astounding $249 billion of debt."

The merger, including debt, would be the fourth largest deal ever attempted in the global telecom, media and entertainment space, according to data. It would also be the 12th largest deal in any sector, the data showed.

played down the drop in AT&T's stock price.

"Once technically driven volatility wears off we expect the stock to move higher as closure will likely provide a new investor catalyst including about $1.5 billion in anticipated cost synergies," Williams said.

(Reporting by in Bengaluru; Editing by and Saumyadeb Chakrabarty)

(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: Wed, June 13 2018. 21:24 IST