After setting off a bidding war with Disney last month, Comcast may be backing down in the battle over 21st Century Fox. Comcast just raised its offer for European pay-tv giant Sky.
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Reported by Deadline, Comcast put forth a new bit of $34 billion for Sky just hours after 21st Century Fox raised its own bid to $32.5. Fox currently owns 39 percent of the European company and has been angling to purchase the remaining 61 percent. This newly increased bid from Comcast as the company is said to be preparing a counter offer for Fox itself in its long-running battle with Disney, but some analysts believe that the Sky offer is a signal that Comcast is walking away from the Disney/Fox deal
RBC Capital Markets analyst Steven Cahall issued a report today noting that, with the bid for Sky, Comcast may be choosing sides as the cable giant simply can’t afford both acquisitions.
“We could be seeing a bidding prioritization by Comcast for Sky over Fox, perhaps due to the fact that Comcast cannot afford both, and has to choose its battles,” Cahall wrote. “The market’s collective wisdom appears to be pricing in a cool down in the bidding war for Fox with Disney and Comcast each rallying today, with Fox down 4 percent.”
Sky has long been seen as Comcast’s priority by many analysts when it came to bidding on Fox, though it was previously believed that Comcast might be making a play for 100 percent ownership of Sky prior to the bidding war with Disney. Now that the Disney deal is looking more and more certain, focusing on Sky — and winning that deal — would give them a better reach into Europe as well as blocking Disney from total control of that company.
However, as we’ve seen, there’s still room for more twists in this story. Earlier this week one of Fox’s shareholders filed a lawsuit to halt the proposed Disney acquisition, claiming that what was filed with the Securities and Exchange Commission wasn’t an accurate estimation of future earning — specifically, the lawsuit takes issues with the lack of projections for Hulu’s future earnings, as well as the estimates for European broadcaster Sky in the years to come.
Currently, Fox has set July 27 as the meeting date for the stockholder vote on the Disney acquisition.
Keep checking back for all the latest updates in the Comcast-Disney-Fox story.
