Disney and Comcast are both interested in buying the entertainment assets of Fox Company. However, 21st Century Fox seems to be in favor of sealing the deal with Walt Disney Company instead of Comcast as the company feels that deal with Comcast may have difficulty in getting regulatory approval.
Incidentally, Walt Disney managed to get the approval from the U.S. Justice Department for its $71.3 billion bid to purchase the entertainment assets of 21st Century Fox. According to an attorney, Mark S. Ostrau, Disney was quick to obtain the regulatory review to get an edge over Comcast in this war of acquiring entertainment assets of Fox.
The American multinational mass media corporation is selling 22 local sports channels. These also include Fox Sports West in Los Angeles and Prime Ticket. Both Disney and Comcast, the cable TV and internet giant of Philadelphia want to win the bid for Fox’s prolific television and movie studios. The other assets that Fox wants to sell include National Geographic, cable channels, its stake in Hulu and international TV assets in Latin America, India, and Europe.
Fox rejects Comcast’s offer
Both the Walt Disney Company and Comcast have been at war vying to purchase the entertainment assets put on sale by Fox. Few developments that took place last week gave a major blow to Comcast’s chances of winning the assets of Fox. Its proposed bid of $65 billion was rejected by the Fox leadership. At the same time, the New York-based company accepted the $71.3 billion offer from Disney.
Incidentally, Disney managed to get the approval for the bid from the Justice Department very fast which certainly has enhanced its chances of winning the bid. Prior to this proposal, the Chairman of Fox, Rupert Murdoch rebuffed the proposals from Comcast twice. A new Securities and Exchange Commission (SEC) filing reveals that both Disney and Fox have said that the deal with Comcast may not work out due to difficulties in getting approval from the regulatory authorities.
The filing says, “a strategic transaction with Comcast would be subject to a greater degree of regulatory uncertainty, including the possibility of an outright prohibition and a higher risk of divestitures and delay to closing, as compared to a strategic transaction with Disney.”
Disney closer to winning the bid
The CEO of Disney, Bob Iger is aspiring to position his Burbank entertainment company for the digital era and hence has made investing in the assets of Fox a major priority. Apart from the regulatory issues, even the $38/share offer from Disney is $10/share more than the $35/share offer from Comcast. Even though the Fox board has now accepted the offer from Disney, its shareholders will still consider all the aspects of the deal before giving the final nod.