terça-feira, 8 de maio de 2018

Wall Street Watches as Comcast and Disney Gird for Battle Over 21st Century Fox Assets

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Comcast’s stock price has taken a hit during the past month since the cable giant confirmed its intention to mount a $31 billion bid for majority control of Sky, the European satellite TV provider that was expected to be part of Disney’s acquisition of key 21st Century Fox assets.
But on Thursday Wall Street seemed to cheer the idea of Comcast moving deeper into a bidding war with Disney over Sky and possibly all of the Fox assets included in the $52.4 billion deal that Fox and Disney clinched on Dec. 14. Comcast shares were up 2.7% in trading Thursday, closing at $31.56, amid a swirl of headlines about steps Comcast is taking to build a war chest for an all-cash offer for the 21st Century Fox assets that could reach $60 billion or more. Comcast shares fell nearly 12% from early March when the company affirmed its intention regarding Sky.

The Financial Times reported Thursday that Comcast would agree to pay 21st Century Fox a $2.5 billion breakup fee if a Comcast-Fox deal was blocked by regulatory hurdles in the U.S. Comcast had not previously included a breakup fee commitment in negotiations with Fox executives last November and December before the Disney agreement was reached, according to a Securities and Exchange filing detailing how the Disney-Fox union came together. The absence of a breakup fee from Comcast was a significant factor in Fox’s preference for Disney’s all-stock offer, in addition to the tax savings that come with a stock-swap deal.

Sources close to the situation say Comcast will likely wait until a judge issues a decision in the AT&T-Time Warner anti-trust trial before launching a full-tilt push to buy the 20th Century Fox Studio, FX Networks, National Geographic Worldwide, and 18 regional sports cablers, as well as Fox’s stakes in Sky and Hulu. Speculation in media and legal circles is growing that U.S. District Court Judge Richard Leon will rule in favor of the AT&T-Time Warner deal proceeding. A favorable ruling against the Justice Department’s effort to block AT&T-Time Warner on anti-trust grounds is expected to spur a burst of buying and selling in the media sector.

The Disney-Fox deal already has revved up the media M&A marketplace and the level of anxiety among leaders of traditional media firms. The conventional wisdom is that the major media congloms that have dominated film and TV for the past 25-plus years now need to grow even bigger to compete with the deep pockets of Netflix, Amazon, and Apple as the digital upstarts muscle into Hollywood’s core business.

Comcast and Disney are already on track to spar over the takeover of Sky. 21st Century Fox has been trying to buy up the remaining 61% of the satcaster that it does not own but the sale process has been bogged down by U.K. regulators. Disney expects to inherit Fox’s existing 39% stake in Sky, if not the whole company if Fox is able to close the $15 billion takeover of Sky set in December 2016.

As Comcast takes its first steps to lining up financing for a sweetened offer that will top Disney’s bid by a double digit margin, analysts see an old-fashioned bidding war erupting. Disney is not likely to back down easily from its Fox deal or for Sky specifically, after making the case for why the deal was important to Disney’s long-term goal of building a global direct-to-consumer streaming platform.
“It is reasonable to expect Disney to counter any potential offer while also changing the composition of its current all-stock offer. In our view, Comcast and Disney are likely to view this as the last remaining transformational deal in media,” analyst Scott Goldman of Jefferies wrote in a May 8 note.

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