Disney Might Have to Pay Even More for Fox Assets

Disney is currently on top of the bidding war for the 21st Century Fox assets, but it doesn't look as though it will stay that way for very long. Insiders are reporting that Comcast will likely increase its overall bid for Fox, making it even more difficult for Disney to potentially acquire the rival company.

Fox originally agreed to a deal to sell its assets to The Walt Disney Company for a total of $52 billion early this year. However, Comcast topped the deal with an all-cash bid worth $65 billion, which caused Disney to quickly respond with an offer of $71.3 billion, consisting of both cash and stock.

That bid is the one currently on the table, having been accepted by Fox. If no more offers were to be made, that's the one that would take, but experts are now saying that Comcast isn't finished just yet.

RBC Capital Markets analyst Steven Cahall told Business Insider that the chances Comcast makes another bid to top Disney is likely, and he isn't the only one. Jefferies analyst John Janedis is predicting that "given the strategic importance of the 21st Century Fox assets, we expect Comcast will come back with a higher offer."

Janedis went on to predict that Comcast's next bid would likely be valued at around $80 billion, slightly higher than Disney's latest offer.

Cahall explained that the price of these assets continues to rise, and the bidding war persists, due to their scarcity. "There is a certainly scarcity premium here that defies the way we normally look at multiples," he said. "These are hugely strategic assets that cannot be necessarily replicated through organic investment."

According to these same insiders, it looks as though Comcast could continue the bidding war for quite a while, and has the potential to beat out Disney for the prize. Cahall noted that "Comcast has the bigger balance sheet so it has more debt capacity and can pay a higher price."

As of now, Comcast has roughly $6 billion in cash, compared to Disney's $4 billion. On that note, Cahall added, "If it has to be an all cash bid, it would suggest that Comcast is in a stronger position."


The stock additions are where Disney has the upper-hand however. By offering half cash and half stock, Disney can likely match any of Comcast's bids. The question now remains, how much is Disney actually willing to spend?

Who do you think will win this tumultuous bidding war? Let us know by dropping a comment below!