Comcast Might Let Disney Win Fox Deal For Just One Thing

Comcast, parent company of NBCUniversal, could concede to rival Disney the remainder of 21st [...]

Comcast, parent company of NBCUniversal, could concede to rival Disney the remainder of 21st Century Fox's assets if its allowed to purchase U.K. pay TV provider Sky, CNBC reports.

Disney and Comcast are engaged in an escalating bidding war for control of the Fox assets, primarily its film and television properties.

Comcast CEO Brian Roberts is prohibited from brokering a deal with Disney executives because Disney and Fox have signed a merger agreement, prohibiting Disney from participating in talks with Comcast about potentially divvying up Fox's assets and preventing future bid increases after Disney's initially-accept bid of $52.4 billion jumped to $71.3 billion in recent weeks.

On Wednesday, Fox upped its bid to purchase 61% of Sky to $32.5 billion, topping Comcast's $31 billion bid. Instead of submitting a new bid for all Fox assets, a source tells CNBC, Comcast is instead focusing on increasing its bid for Sky. Fox owns that other 39% and aims to purchase the remainder of the European pay-TV giant.

As explained by CNBC:

"Before that happens, Fox actually may need to increase its latest bid again. That's because a U.K. takeover panel is deciding if Sky is worth more than 14 pounds per share, due to the so-called "chain principle," which links the value of Sky's independently traded shares to the 39 percent that Fox already owns (and Disney is bidding for as part of its $71.3 billion offer). Assuming Fox agrees to pay a higher mandated price for Sky, Comcast would then increase its bid over that price, the person said."

If Comcast walks away with Sky, it may reassess its bidding strategy for the leftover Fox assets, the source said. The takeover panel could force Comcast to pay even more for Sky if the conglomerate submits another bid for Fox — meaning Comcast would be bidding against itself.

CNBC points out this move could be Comcast's attempt at bargaining with Disney: if Sky is won, Comcast could back off on landing the rest of Fox's assets.

Should that be the outcome, the U.K. takeover panel would rule on the value of Fox's Sky offer, Comcast would top Fox's offer for Sky, and Disney could signal to Comcast its intention to drop Sky if Comcast throws the white flag on the remaining Fox assets.

Disney issued its own stockholders a letter last month urging their vote on the merger between The Walt Disney Company and Twenty-First Century Fox, Inc., which would see Disney enter into a separation agreement with a newly-formed subsidiary of 21CF dubbed "New Fox."

That initial agreement would "transfer to New Fox a portfolio of 21CF's news, sports and broadcast businesses, including the Fox News Channel, Fox Business Network, Fox Broadcasting Company, Fox Sports, Fox Television Stations Group, and sports cable networks FS1, FS2, Fox Deportes and Big Ten Network, and certain other assets," the letter read, indicating assets not falling under the Disney deal.

Under the new deal, "21CF will retain all assets and liabilities not transferred to New Fox, including the Twentieth Century Fox film and television studios and certain cable and international television businesses."

Such a deal would allow Disney-owned Marvel Studios to integrate Fox-controlled Marvel Comics properties like X-Men, Deadpool, and the Fantastic Four into the shared Marvel Cinematic Universe.

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