Comcast offers to buy Fox media assets for $65 billion in cash

Comcast Corp offered $65 billion on Wednesday for Twenty-First Century Fox Inc media assets, emboldened by AT&T Inc prevailing over the Trump administration`s attempt to block a merger with Time Warner Inc .

The all-cash offer for Fox`s movie and TV studios and other assets including the X-Men franchise, opens a war with Walt Disney Co , which has bid $52 billion in stock. Comcast described the bid as 19 percent higher than Disney`s bid today.

Comcast is expected to lead a wave of traditional media companies trying to combine distribution and production to compete with Netflix Inc and Alphabet Inc`s Google. The younger firms produce content, sell it online directly to consumers and often offer lucrative targeted advertising.

AT&T won a court victory over sceptical U.S. antitrust regulators on Tuesday when a federal judge allowed it to buy Time Warner for $85 billion, which was widely taken as a green light for Comcast to submit its expected bid.

Comcast may face more difficulty than AT&T and other would-be acquirers, though, since Comcast already has its own TV and movie studios in the NBC Universal division, a content overlap AT&T-Time Warner lacked.

Shares of Comcast, Fox and Disney were barely changed in after-hours trade.

Comcast in a statement outlined an offer that was similar to Disney`s, including a commitment to the same divestitures. It said that it would agree to litigate any action taken by the Justice Department to block the deal.

In a letter to the Fox board, Comcast Chairman and Chief Executive Brian Roberts said, "We are also highly confident that our proposed transaction will obtain all necessary regulatory approvals in a timely manner and that our transaction is as or more likely to receive regulatory approval than the Disney transaction."

Justice Department lawyers who tried to stop AT&T`s $85 billion deal expect consumers will lose out as bigger companies raise prices, and some lawyers saw that as a concern in a Comcast-Fox deal which would put two movie studios and two major television brands under one roof.

"One cannot ignore the fact that there`s less independent content to go around," after the AT&T deal, said Henry Su, an antitrust expert with Constantine Cannon LLP.

Still, the AT&T court fight gave Comcast valuable information about how to structure a Fox deal, said David Scharf, a litigation expert with Morrison Cohen.

"Any deal that`s coming down the pike that`s not baked yet knows the government`s playbook. They know what the government is concerned about," he said. "They can learn how to structure a deal to make it more palatable."

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

Comcast may have a tough time winning over Fox`s largest shareholder, Rupert Murdoch`s family. They own a 17-percent stake and would face a multi-billion dollar capital gains tax bill if he accepted an all-cash offer from Comcast, tax experts have told Reuters.

Craig Moffett, an analyst with MoffettNathanson, said in a research note that Disney could prevail for other reasons.

"Disney has the superior balance sheet, cost of debt, equity and rationale to emerge victorious over Comcast in a bidding war,” Moffett said.

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)