Comcast blinks in fight with Disney for Twenty-First Century Fox
Withdrawal leaves path open for Disney to buy the Twenty-First Century Fox assets with its $71B US bid
In a battle among media giants for control of Twenty-First Century Fox's entertainment business, Comcast has blinked.
The cable and media company said Thursday that it is dropping its bid, instead focusing on its pursuit of the European pay-TV operator Sky. Fox owns 39 percent of Sky and has also been trying to buy the 61 percent it doesn't own.
Comcast had been fiercely duelling with Disney for Twenty-First Century Fox assets, but on Thursday said that it would not raise its $66 billion US offer for the company.
The withdrawal leaves the path open for The Walt Disney Co. to buy the Twenty-First Century Fox assets with its latest offer of $71 billion US. The Department of Justice has okayed Disney's bid as long as it sells 22 regional sports networks. Fox shareholders are set to vote on Disney's offer July 27.
"This was the final chapter in this soap opera," said GBH Insights analyst Daniel Ives. "Now the laser focus for (Comcast CEO Brian( Roberts and Comcast is the battle royale for Sky assets to build a strong beachhead content strategy in Europe."
Last week Comcast boosted its offer for European pay TV service Sky to $34 billion US. Sky operates in Austria, Germany, Ireland and Italy as well as the U.K. It has 22.5 million customers, attracted by offerings such as English Premier League soccer and "Game of Thrones."
Fox has made a $32.5 billion US offer for the portion of Sky it doesn't own, but Disney said in an SEC filing on Friday that it might not raise its bid to compete with Comcast's offer.
"Twenty-First Century Fox may elect not to increase the price offered by it in the Sky acquisition and any increase in the debt financing for the Sky acquisition would require Disney's consent, which Disney may elect not to provide," Disney said in the filing.
Comcast Corp. and Fox have been battling for Fox and Sky in order to amass more programming as they compete for viewers with both traditional TV networks and technology companies such as Netflix and Amazon.
Comcast's stock rose more than 2.5 per cent in Thursday premarket trading. Shares of Disney climbed 1.2 percent, while Fox's stock dipped one per cent before the opening bell.