Comcast’s bid for Fox has always been a bit of a longshot, especially once their entry spurred Disney to increase their bid quality. Now, though, a legal decision in an entirely different merger, Comcast might finally be giving up their chase of Fox’s assets.
The different merger in question: AT&T’s bid for Time-Warner, which is more than likely to go through. It has always been likely to go through, but for Comcast, it was a matter of timing; their bid for Fox was predicated on the AT&T merger going through unimpeded by appeal, which would in theory have put pressure on Disney’s stock price as Disney stared down Comcast’s rival bid for Fox.
There were more antitrust concerns with Comcast’s bid, and a quick approval of the AT&T deal would have theoretically dispelled those concerns to the point that Disney shareholders might get nervous about their deal, weaken Disney’s stock price, and cause Disney’s cash-plus-stock offer to plunge in value.
Instead, according to CNBC, the Department of Justice’s decision to appeal that ruling might be enough to push Comcast finally and totally out of the race, despite the fact that no one thinks the appeal will be successful.
For Comcast it doesn’t really matter that the only way the Department of Justice can win is if the D.C. Circuit Court of Appeals rejects the fundamental premise behind U.S. District Judge Richard Leon’s 172-page decision. The appeal itself may cast enough doubt on Comcast’s chances that it will more formally shift its attention to acquiring Sky rather than the remainder of Fox, which includes the Fox movie studio, [Star] India, a 30 percent stake in Hulu and other assets, according to a person familiar with the matter.
Comcast only moved forward with its deal for Fox because of Judge Leon’s decision on AT&T. Comcast has already signaled a shift in strategy by bidding on Sky instead of raising its bid for Fox. Fox shareholders are set to vote on Disney’s improved cash-and-stock offer on July 27. The U.S. government has already cleared Disney’s purchase of Fox’s assets.
Comcast’s next move is likely to be their continued pursuit of Sky, because apparently they have to acquire assets constantly or be seen as a dying company:
The DOJ decision to appeal doesn’t affect Comcast’s bid to acquire Sky, the person said. A Comcast spokesperson declined to comment.
This also means the Disney-Fox deal is essentially cleared to go, and we could see Fox’s network of RSNs sold to facilitate that, as Disney agreed to do to get regulatory approval.
[CNBC]
