May 23, 2018 at 11:22AM
via Ars Technica
Comcast today said it is preparing an offer to buy major portions of 21st Century Fox, which would give it majority control of Hulu and other media properties.
Walt Disney Company already has a $52.4 billion all-stock deal to buy the 21st Century Fox properties. But Comcast was rumored to be lining up $60 billion in financing in order to make a hostile bid for the Fox assets, and Comcast's announcement today confirms it.
Comcast "is considering, and is in advanced stages of preparing, an offer for the businesses that Fox has agreed to sell to Disney," Comcast's announcement said. Comcast is working on the offer in preparation for shareholder meetings in which the Disney/Fox deal will be considered.
The Fox properties for sale do not include assets such as the Fox News Channel, Fox Business Network, and Fox Broadcasting Company. Those properties would be spun off into a company being referred to as "New Fox," and Comcast would acquire 21st Century Fox after the spinoff.
The Fox sale to either Disney or Comcast would include 21st Century Fox's film and television studios; cable entertainment networks; the Fox Sports Regional Networks; and international properties including Star in India and Fox's 39-percent ownership of Sky across Europe.
Comcast seeks control of Hulu
The sale would also include Fox's 30-percent stake in Hulu, the popular online video streaming service. Comcast already owns 30 percent of Hulu, so a deal with Fox would give the nation's largest cable company majority control over the online video provider.
Comcast said its offer for Fox "would be at least as favorable to Fox shareholders as the Disney offer."
"While no final decision has been made, at this point the work to finance the all-cash offer and make the key regulatory filings is well advanced," Comcast also said.
Separately, Comcast is trying to buy Sky, the British pay-TV company. After an initial review, a British government official said the government is unlikely to challenge a Comcast/Sky merger.
In the US, a Comcast/Fox deal would face scrutiny from the Department of Justice, which is trying to stop AT&T from buying Time Warner Inc. A judge is expected to rule on the AT&T/Time Warner merger by June 12, and Comcast was reportedly waiting for the outcome of that trial before proceeding with a bid for Fox assets.
"Comcast made the announcement Wednesday about its preparations because its executives were worried that Fox and Disney might rush a shareholder vote before the decision on the AT&T/Time Warner deal came down, according to people close to Comcast," The Wall Street Journal reported today.
Comcast already owns NBCUniversal thanks to a 2011 acquisition; it was the NBC purchase that gave Comcast its minority stake in Hulu. US regulators imposed merger conditions that prevent Comcast from exercising operational control over Hulu, but those conditions will expire on September 1 of this year.