Disney confident of acquiring Fox assets despite Comcast rivalry
09 MAY 2018
Walt Disney [NYSE:DIS] is confident of succeeding in its USD 52.4bn attempt to acquire assets from Twenty-First Century Fox [Nasdaq:FOX], despite the threat of a potential rival bid from Comcast Corp [Nasdaq:CMCSA], The Wall Street Journal reported. Robert Iger, chief executive of Disney, told analysts in a conference call yesterday, 8 May, that he remains confident the Fox assets under discussion will be a good fit with the business once the all-share transaction has secured approval.
Sources close to the matter say Comcast has lined up funding for a possible all-cash hostile bid for Fox’s assets, the item reported. Fox had previously turned down a Comcast offer which exceeded that from Disney by 16% in value, citing regulatory concerns, the report noted.
In the event of a bidding war, Disney may have to revise its offer upwards or offer cash as well as shares, the report said. Edward Jones analyst Robin Diedrich said Disney should find it easy to raise sufficient debt to conduct such a deal, the item reported. While both Disney and Comcast have robust credit ratings, Disney has the stronger balance sheet, the analyst said.
AT&T [NYSE:T] is attempting to acquire Time Warner [NYSE:TWX] and if that deal passes antitrust hurdles, Comcast is more likely to launch a hostile offer for the Fox properties, sources with close links to the matter said. Both transactions would be considered vertical deals which bring together distribution and content, the report pointed out.
As both Fox and Comcast operate local sports networks, it may be necessary for the would-be acquirer to make disposals in that area to see a deal can succeed, the report said.
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