Fox shares pop ahead of expected Comcast bid
Twenty-First Century Fox Inc`s
A firm offer from Comcast, widely expected later in the day, could upend Fox`s $52 billion all-stock deal to be bought by Walt Disney Co
U.S. District Judge Richard Leon on Tuesday approved AT&T`s buyout of Time Warner, rebuffing an attempt by U.S. President Donald Trump to block the takeover and potentially clearing the path for more such deals in a rapidly changing media industry.
Fox shares rose 7 percent in afternoon trade. Shares of other telecom and media companies such as Sprint Corp
While the judge`s approval of AT&T`s deal for Time Warner may embolden Comcast, it does not guarantee clear passage for its acquisition of Fox`s entertainment business, according to antitrust lawyers.
Henry Su, an antitrust expert with Constantine Cannon LLP, said that Comcast already owns significant amounts of content because it bought NBC Universal.
Both companies operate television and film studios, have a stake in streaming service Hulu and own regional sports networks.
Craig Moffett, an analyst with MoffettNathanson, said Judge Leon`s opinion will be seen as a green light for Comcast to bid for Rupert Murdoch`s Fox, but tipped Disney as the potential winner in a bidding war.
"We continue to believe that Disney has the superior balance sheet, cost of debt, equity and rationale to emerge victorious over Comcast in a bidding war," Moffett said.
Comcast said in May it was in advanced stages of preparing a higher all-cash offer for Fox`s assets but did not indicate the value of its bid. Reuters reported last November that both Comcast and Verizon Communications Inc
The move by media companies to consolidate highlights the threat from online players such as Netflix Inc
AT&T`s stock, however, was down 5 percent, with analysts raising concerns about the debt the company would absorb. Research firm MoffettNathanson said AT&T will carry $249 billion of debt after the merger.
Cowen and Co analyst Gregory Williams played down the drop in AT&T`s stock price.
"Once technically driven volatility wears off we expect the stock to move higher as closure will likely provide a new investor catalyst including about $1.5 billion in anticipated cost synergies," Williams said.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.