Comcast looking again at Fox after higher bid was rejected – report

Comcast made an offer last year for 21st Century Fox that was significantly higher than Disney’s successful bid, and may make a fresh move to acquire the company, or its European pay TV arm Sky, according to the Wall Street Journal.

The Journal, citing unnamed sources, reports that Comcast made a bid for Fox that was in the low US$60 billion (€49 billion) range, significantly higher than Disney’s US$52.4 billion offer.

Fox rejected the Comcast offer on concerns that a deal would face antitrust risks, according to the paper.

Fox will file a proxy statement on its agreement with Disney ahead of shareholder approval, which may reveal details of the process that resulted in the pair’s agreement. According to the Journal, Comcast executives are likely to study the proxy carefully to see if it indicates its bid for the company was higher, and was seriously considered.

The Journal suggests that Comcast could be motivated to renew its bid if the AT&T-Time Warner merger is approved, which would weaken Fox’s case for rejecting Comcast on regulatory grounds.

According to the paper, Comcast could make alterations designed to secure approval, such as removing regional sports channels from the agreement. The paper’s sources also say that Comcast could potentially focus on acquiring European pay TV operator Sky.

Fox’s own bid for the 61% of Sky that it doesn’t already own is currently undergoing review by the UK’s competition watchdog, the CMA, on media plurality grounds. In January, the CMA indicated that the deal was unacceptable in its current form.

Comcast’s interest in Fox is motivated in part by its desire to expand internationally, as well as by a desire to secure more scale in content production and potentially to increase its stake in online service Hulu.

Asked about M&A by analysts at the time of Comcast’s last quarterly earnings release in January, CEO Brian Roberts said that the company was “always looking for more value for shareholders from opportunities” but that “there is nothing we feel we have to acquire – I think that’s an important point to emphasize”.

However, answering a separate question on opportunities for restructuring of the media and distribution businesses, Roberts also said that it would be “interesting to see if that all plays out” and promised “more information in the quarters ahead”.

Speaking to analysts last week after Disney reported generally positive first fiscal quarter results, which saw the company take a US$1.6 billion benefit from US tax reform, CEO Bob Iger said that the Fox acquisition would deliver “more content and the production capabilities and talent to produce even more” as well as enhancing its direct-to-consumer presence and enabling geographic diversification of the business.

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