COMCAST’S HOSTILE BID. Cable giant Comcast Corp. is getting the pieces in place to make a hostile bid for 21st Century Fox’s entertainment assets..By Todd Horwitz, Bubba Trading.

 

Comcast Prepares for Bid

Cable giant Comcast Corp. is getting the pieces in place to make a hostile bid for 21st Century Fox’s entertainment assets should it choose to do so, according to people familiar with the situation. Fox agreed in December to sell the assets in question to Walt Disney Co. for $52.4 billion in stock. Comcast is considering making a play to break up that deal and has lined up around $60 billion in financing to make an all-cash offer for the Fox assets, the people say.

However, if the government shoots down AT&T-Time Warner, Comcast does not plan to bid. Comcast is asking investment banks to increase the bridge financing facility they have already arranged for the Sky offer by as much as $60 billion to finance the Fox bid, Reuters previously reported.

Comcast originally touted its strong stock as a reason for Murdoch to accept a deal from the largest US cable provider instead of Disney. But Comcast shares have fallen about 15 percent since Disney first announced its bid for Fox, and now Comcast thinks it has a better chance with an all-cash bid, even if Fox CEO Rupert Murdoch prefers Disney shares.

Comcast CFO Michael Cavanaugh said on the company’s last earnings call, “Regarding potential acquisitions, it is our job to continuously evaluate whether there are opportunities for us to create value. But should we pursue anything while our stock is at these levels, while circumstances can always change, I think it is unlikely that we would use Comcast shares as a medium of exchange for a transaction.”

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Comcast believes Disney cannot match an all-cash bid for Fox because if it adds more stock to a deal, Fox stock will go down, depressing the value of the offer, sources told CNBC.

Keep those stops tight
Todd “Bubba” Horwitz

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About the author

Todd Horwitz - Author of “Average Joe Options“. Todd began his trading career in 1980 at the CBOE. He was one of the original traders in the OEX & helped start the SPX. He is a member the CME where he trades S&P futures as well as foreign currencies & is a regular contributor to CNBC, Bloomberg, BNN, Fox & many other major news networks.