Comcast Corporation (NASDAQ:CMCSA) has a launched a hostile bid to have a portion of 21st Century Fox assets. The move by Comcast Corporation may complicate matters for Walt Disney Co (NYSE:DIS) which is seeking to purchase a big portion of Fox from Rupert Murdoch. According to sources close to the matter, Comcast has been working of a deal that could overtake the $52.4-billion offer by Disney.
A new bid from Comcast would directly challenge the efforts by Disney Chief Executive Bob Iger has been working hard to purchase a big portion of Fox in a bid cement the company’s future as well as his legacy. In the wake of entry of Comcast, Disney may be forced to raise its bid so as to beat competition. The turn of events also puts James Murdoch, the CEO of Fox in a very difficult position as he will have convince shareholders why he accepted a lower bid when there was a better deal.
Investors were happy to hear that Fox could still be in play and the company’s stock rose by 2% during the Tuesday mid-morning trading. Since October last year, Fox shares have rose by around 50% while Disney shares fell by less than 1% and that of Comcast shed off 3%.
Comcast made the first attempt last fall but Murdoch was not convinced by the efforts made by Brian Roberts, the chairman of Comcast but instead opted for all-stock bid offered by Iger. The deal offered by Disney would allow shareholders of Fox to become major shareholders of Disney.
However, many analysts have argued that Comcast will not be wiped out so easily. Last fall, Comcast placed a bid of $60 billion to buy Fox assets and the company is expected to offer the same amount of even more so as to stand out as the favorable contender.
Roberts says the company is capitalizing on areas where it can boost its position by purchasing complementary businesses that offer new capabilities, markets as well as growth opportunities.
Comcast recently finalized a deal to purchase European satellite-TV provider Sky for $31 billion. Fox had been making bids to for Sky for almost 17 months.