Comcast offers $65 billion to buy the Fox studios Disney wants

After AT&T-Warner green light, Comcast expected to rival Disney for Fox

Comcast just made its move. 

The cable and internet provider, which owns NBC Universal,  late Wednesday offered $35 a share, or $65 billion, in cash for 21st Century Fox film and TV studio assets, topping the $52 billion Walt Disney Co. had bid. 

Comcast’s offer, representing a 19% premium to Disney’s all-stock offer, launches a bidding war for Fox studios and networks that both companies see as integral to becoming stronger competitors in a rapidly changing media landscape.

“We firmly believe that the truly great media companies of the next century will be large, integrated entities with multiple growth engines across a wide swath of the global entertainment industry,” Comcast CEO Brian L. Roberts said during a conference call late Wednesday.

Comcast also offered to reimburse the $1.5 billion breakup fee Fox would have to pay Disney. 

During regular market hours, Fox (FOX) shares were up by more than 7% and Disney (DIS) shares rose nearly 2%, while Comcast (CMCSA) slipped 0.19%.

Fox shareholders have scheduled a meeting for July 10 to vote on the Disney merger, but Comcast said it is seeking to reach an agreement before that time.

Philadelphia-based Comcast offered to buy the Fox assets last year, but was spurned by Fox, which made a deal with Disney. Last month, Comcast said it planned to make a higher all-cash bid for the Fox studios. 

A court ruling in favor of AT&T’s $85 billion acquisition of Time Warner on Tuesday in a Justice Department antitrust case was seen as a green light to more media mergers, starting with Comcast.

Fox did not respond to requests for comment.

Despite their grip on the nation’s internet, phone and pay-TV needs, companies such as Comcast, Verizon and AT&T are aggressively seeking to add new businesses. An entertainment library, such as shows produced by Fox’s studios and its regional sports networks, has emerged as a coveted alternative to the core subscription business now characterized by tepid wireless revenue growth and a shift by households to cut the cable cord.

“For either of these companies, (a merger) just bulks up their reach and their scale so they can better compete with the Google, Amazon and Netflix gang,” Forrester principal analyst Jim Nail said.

The 21st Century Fox assets up for grabs include the historic 20th Century Fox movie studio, which has produced such classics as “Miracle on 34th Street,” “Alien,” “Titanic” and the original “Star Wars” film, plus Fox’s television studio (“The Simpsons,” “Empire”) and FX and National Geographic channels. They also include a one-third stake in Hulu, Fox’s 22 regional sports networks and its stake in U.K.-based satellite TV and Internet provider Sky. 

Disney, Comcast and Fox each currently hold 30% stakes in Hulu.

More: What could a Comcast-Disney duel for Fox mean for you … and the Marvel Universe?

More: AT&T can proceed with $85 billion bid for Time Warner, judge rules, paving way for landmark deal

A successful Comcast deal would be a blow to Disney and CEO Bob Iger, who has pinned Disney’s future to hit movies and TV shows it could gain with Fox that could bolster Disney’s own streaming services.  

A Comcast win would spell disappointment for Marvel fans who may have looked forward to an X-Men mash-up film with  ​​​​Marvel’s ​​​”The Avengers” and Fox’s  “X-Men,” “Deadpool” and “Fantastic Four.”

And Disney’s hopes to secure the complete rights to “Star Wars” would also be thwarted by a Comcast deal.

More: Cord cutters: How Disney’s deal to buy Fox assets will change TV, movies, sports

More: What’s the future of the Fox network in the wake of Disney deal?

Contributing: Ed Baig

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