Comcast concedes to Disney in bidding war for Fox assets

Brenda Watkins
July 20, 2018

Disney launched its offer for Fox's assets last December at $52.4 billion as the Murdoch family announced they would reorganize to focus on Fox News, the Fox broadcast network and some sports operations.

It turns out, $71 billion was just a tad too rich for the media conglomerate.

In a statement, Comcast said that it "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".

Given the timescale, analysts had concluded that Comcast realistically had until the end of this week to come back with a new Fox offer to top Disney. Comcast didn't specify its reason for pulling out of the race but said it will instead focus on its offer to purchase a percentage of British telecommunications company Sky. "At a time of dynamic change in the entertainment industry, the combination of Disney and Fox's unparalleled collection of businesses and franchises will allow us to create more appealing high-quality content, expand our direct-to-consumer offerings and worldwide presence, and deliver more personalized and compelling entertainment experiences to meet growing consumer demands around the world". The agreement between the two companies states that Murdoch pays up to £13 a share, Disney for each £1 a share above that. If Fox wins, it will likely mean Disney will have to increase what it's paying for Fox anyway as the total value of the company will have increased. The company is still looking to purchase global broadcaster Sky.

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This also comes as Rupert Murdoch, 86, looks to hand the company over to his sons Lachlan and James after a tumultuous year that saw Fox News part ways with its creator Roger Ailes and biggest star Bill O'Reilly following multiple reports of sexual harassment or assault from staffers. "I don't think Disney wants to give up Sky", said Crispin Odey, whose eponymous hedge fund owns Sky shares.

In a battle among media giants for control of Twenty-First Century Fox's entertainment business, Comcast has blinked. Lions Gate Entertainment Corp LGFa.N rose 5.2 percent on investor speculation it could become an acquisition target.

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