PHILADELPHIA: Just shy of a month after the Walt Disney Company significantly upped the ante in its bidding war for 21st Century Fox, rival Comcast Corporation on Thursday withdrew from the race for most of the assets of the Murdoch family controlled media conglomerate. The broadcasting and cable television giant however made clear it would still try to expand its international footprint by acquiring the 61% of European broadcaster Sky Plc that is not owned by Fox.
An official statement from the company released Thursday reads: “Comcast does not intend to pursue further the acquisition of the Twenty-First Century Fox assets and, instead, will focus on our recommended offer for Sky.”
Disney first announced its bid for Fox’s assets in a $52.4 billion bid last December. But following AT&T’s successful acquisition of Time Warner, Comcast was emboldened to make a $65 billion all-cash bid of its own, confident at the time that regulatory approval for a Comcast-Fox deal wouldn’t be an issue. Disney countered that offer with a $71.3 billion bid last month.
Comcast’s decision not to make a higher bid has less to do with loss of interest over the price and more to do with recent developments on the regulatory front. First, the Antitrust Division of the US Department of Justice cleared Disney’s Fox bid, with Disney agreeing to spin off Fox’s sports networks to earn the government’s blessing. Then, in an unrelated development that is more significant for Comcast, the Justice Department last week appealed a federal court’s approval of AT&T’s purchase of Time Warner. Ergo it meant that if Comcast were to beat Disney to the Fox assets, getting approval from the Justice Department was no longer a foregone conclusion.
Comcast’s focus will now be fully on beating Disney-Fox for control of Sky. Comcast boosted its takeover bid for Sky to $34.2 billion last Thursday after Fox increased its offer to $32.5 billion just a day earlier.
Disney said in a regulatory filing last week that Fox might not raise its bid to compete with Comcast’s offer, meaning Comcast is likely to end up with Sky and Disney the rest of Fox that’s up for sale. That includes other international properties, including Star India as well as the controlling stake in streaming service Hulu, in which Disney and Fox together hold 60%. Of the remaining 40%, Comcast holds 30% and AT&T 10%.
Some Fox businesses, including Fox News Channel and the Fox television network, will remain with Rupert Murdoch and his family.
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