Comcast outbids Disney with $65 billion offer for Fox assets

Brian Roberts

Yesterday, CEO Brian Roberts told investors that Comcast is in the "advanced stages" of preparing a bid for 21st Century Fox - an offer dependent on the ruling in the AT&T-Time Warner anti-trust case.

Following a federal judge's approval of AT&T's merger with Time Warner, Comcast stepped forward with a $65 billion all-cash offer for Fox, which it billed as superior to The Walt Disney Co.'s $52.4 billion all-stock bid. Both Disney and Comcast (through its ownership of NBCUniversal) hold 30 per cent of the streaming service - 21st Century Fox owns another 30 per cent and Time-Warner owns the last 10 per cent. Comcast is expected to bid for some of Twenty-First Century Fox Inc. assets as soon as tomorrow.

It had previously approached Fox about a potential deal, back in November, but its efforts had been rebuffed and Fox had instead recommended an all-stock deal with Disney. The assets at stake include the Fox film studio (which owns the Avatar franchise, the film rights to the X-Men and Fantastic Four and the original Star Wars), its TV studio, its cable networks and its stake in Hulu.

Disney itself has "surgically" structured a transaction that "might be doable", avoiding Fox Broadcasting and big Fox sports channels, USA antitrust chief Makan Delrahim said last week.

Roberts said Murdoch had built "one of the world's great media and entertainment companies", and that its history was similar to that of Comcast's.

A judge approved AT&T's $85.4 billion takeover of Time Warner on Tuesday, signaling that other deals could likely be approved as well.

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"Our proposal represents a premium of approximately 19 percent to the value of Disney's offer as of noon today". It also offered to pay Fox's $1.525 billion breakup fee owed Disney, if Fox went with Comcast.

Henry Su, an antitrust expert with Constantine Cannon LLP, said that Comcast already owns significant amounts of content because it bought NBC Universal. According to regulatory filings, an unnamed company, widely thought to be Comcast, previously made an offer for Fox.

Why this matters: Although the ruling is a huge setback for the DoJ, its almost two-year legal battle to try and block the Time Warner deal is a sign it's determined to challenge massive mergers. Disney wouldn't face the same issues because it isn't a television distributor as the way Comcast and AT&T are. Disney and Fox did not immediately respond to a request for comment.

Update: Fox sent out a statement confirming that it has received the bid.

And the AT&T-Time Warner deal is not necessarily yet in the clear.

Just because Comcast has made a higher offer doesn't mean that Fox will take it.

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