Comcast Tops Disney's Offer For Fox With $65 Billion Bid

Comcast readying new bid for 20th Century Fox film and TV assets

The Murdochs own about 17 percent of Fox shares.

The Leon ruling convinced Comcast, the second-largest cable company in the United States - which already owns NBCUniversal - that adding Fox would pass regulatory muster. The $35 per share offer represents a 19% premium on Disney's $52.4 billion all-stock offer for the same assets. But AT&T and Time Warner are in different but complementary businesses.

The merged company, executives said, would be better able to compete at a time when people spend more time watching videos on phones and tablets than on TV.

These assets are expected to include the Fox movie studio, some networks like FX and Nat Geo, the company's Hulu stake, and more.

Fox's board had rejected a bid from Comcast previous year in part due to concerns over regulatory approval. So far, only Fox has responded, saying it would "carefully review" the proposal. Disney has deep pockets, so if they wanted to they can increase the offer to meet Comcast's, but there is the matter of all-cash versus stock, something that 21st Century Fox will have to weigh.

As part of the latest offer, the telecom giant said it would pay Fox $4 billion if the deal doesn't get approved by regulators.

"21st Century Fox remains subject to the Disney Merger Agreement", Fox said in a statement. Indeed, the proposal unveiled on Wednesday include a US$2.5 billion termination fee.

Comcast, the United States media conglomerate, has submitted another offer to buy parts of 21st Century Fox, after getting rebuffed past year in favour of Disney.

But both Copps and Radia expressed doubt that the Justice Department will be in a hurry to challenge future mergers.

Like Disney, Comcast already controls a major television network (NBC), a motion picture studio (Universal Pictures), several animation studios (Illumination Entertainment, Dreamworks Animation) and a theme park empire (Universal Studios). A Comcast-Fox merger, like a Disney-Fox merger, would be similarly vertical by combining a distributor with a content producer. Both are also interested in expanding internationally at a time when the US television business is slowing. The decision now rests with Judge Leon because the Justice Department sued AT&T to block the merger. But the big cable and media group Comcast is expected to offer a higher bid.

And Comcast could come out a victor on the remaining 61 percent of Sky, which Fox has sought to buy amid a tangle with European regulators, and which Comcast openly covets as well.

But Comcast investors haven't welcomed the company's sudden appetite for megadeals. If Comcast buys Fox and Sky, the cable giant could become one of America's largest corporate borrowers and its credit ratings may teeter at the bottom edge of investment grade.

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