DISNEY VS. COMCAST. Comcast noted that it hasn’t committed to a bid quite yet, saying “no final decision has been made.” By Todd Horwitz, Bubba Trading

 

Comcast to Outbid Disney?

Comcast Corp. is escalating its threat to disrupt Walt Disney Co.’s megadeal to buy the bulk of 21st Century Fox Inc.’s assets, a potential move that could reshape the power structure in the entertainment industry.

Comcast said on Wednesday it is in advanced stages of preparing a cash offer that would top Disney’s all-stock, $52.4 billion deal for Fox’s entertainment businesses. One major Fox shareholder is also urging the company to engage with Comcast, adding pressure as the cable giant gets ready to appeal directly to Fox shareholders. Fox’s board last year rejected Comcast’s original bid, even though it exceeded Disney’s offer, because directors believed it was riskier with regulators and would require the sale of too many valuable assets to win approval.

In its press release, Comcast noted that it hasn’t committed to a bid quite yet, saying “no final decision has been made.” Comcast and the rest of the media industry are waiting to see how Judge Richard Leon will decide in the Justice Department’s attempt to block AT&T’s $85 billion bid to acquire Time Warner. That decision will be made on June 12.

Investor Christopher Hohn in a letter Wednesday called on 21st Century Fox Chairman Rupert Murdoch to entertain a potential offer by Comcast. Hohn, who said his management fund owns 7.4 percent of Fox’s stock, said that he believes Disney’s offer poses a potentially greater regulatory hurdler because of the entertainment giant’s cable TV and movie studio holdings.

He said Fox’s board had a responsibility to shareholders to favor the highest bidder, even if it would amount to a greater capital gains tax hit to Murdoch and his family. “If Comcast formalizes a superior all-cash offer, we would support that offer over the current Disney offer,” Hohn wrote to Murdoch.

Keep those stops tight
Todd “Bubba” Horwitz

IN ASSOCIATION WITH

Financial Markets & Political Commentary

 

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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.