By Steven Zeitchik | Washington Post
NEW YORK – Comcast made a stunning $65 billion bid Wednesday for 21st Century Fox in what is expected to be the first of many attempts to buy up pieces of the entertainment world in the wake of AT&T’s decisive legal victory over the government to buy Time Warner.
Comcast’s offer sets up a battle of wills between two of the most dominant and deep-pocketed entertainment companies in the world – Walt Disney and Comcast, the nation’s leading cable company which already owns Universal Studios and NBC. Comcast’s offer is about 19 percent higher than what Disney offered late last year.
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But the headline-grabbing bid is unlikely to be the last to be announced in the coming months, given the government’s failed attempt to stop AT&T from purchasing Time Warner. Media and entertainment stocks soared Wednesday on speculation of a wave of consolidation in the industry.
Comcast’s is an all-cash deal at a significant premium over Disney’s $52.4 billion all-stock package. Its move will likely trigger a new offer from Disney and even a bidding war as two media giants battle for dominance both at home and overseas.
The fight will play out in real time over the next week as Fox readies for a scheduled board meeting on June 20 at which the issue will be raised. A meeting with 21st Century Fox shareholders on July 10 to discuss the offers will further cement the company’s fate.
Comcast Pictures, had been waiting to see if the courts were willing to condone vertical integration – the combining of two dissimilar businesses – before proceeding. With the ruling Monday in favor of the tie-up of a telecom and content company, the company now believes it has a green light.
Executives from Disney and Fox announced in December they had agreed to a deal that would see Rupert Murdoch’s company sell many of its assets, including his film and television studios, National Geographic, a 30 percent stake in Hulu and its 39 percent stake in European cable giant Sky to Disney for $52.4 billion in stock.
But as the deal has been awaiting government approval, Comcast, led by chief executive Brian Roberts, has been preparing its own bid, taking another run at a company it has long coveted and hoping to sway Murdoch and shareholders with a sweeter offer.
Comcast and Disney desperately want Fox for their own reasons, analysts say.
Disney hopes to build a massive stable of content as it competes with tech giants like Netflix and Amazon, populating its own streaming service with as many proprietary shows and movies as possible.
“We’re excited about this extraordinary opportunity to significantly increase our portfolio of well-loved franchises and branded content to greatly enhance our growing direct-to-consumer offerings,” Disney chief Robert Iger said at the time of the Disney-Fox announcement.
For its part, Comcast wants content that can help it beef up its …read more
Source:: The Mercury News – Entertainment