Twenty-First Century Fox Inc. shares dropped more than 2 percent on Monday, as investors viewed the absence of a new bid by Comcast Corp. for most of Fox’s assets as meaning its bidding war with Walt Disney Co. for them is likely over.
Disney (DIS) fended off Comcast’s (CMCSA) $66 billion all-cash challenge to its deal for the Fox (FOXA) assets last month by sweetening its offer to $71 billion in cash-and-stock. Time is running out for Comcast to come back with a new offer, with Fox shareholders scheduled to vote on the Disney deal on July 27.
CNBC reported on Monday, citing sources, that Comcast was “highly unlikely” to make a new offer for the Fox assets. However, sources familiar with the matter told Reuters that Comcast CEO Brian Roberts has kept his arrangements with banks in place to make a new offer, but he has not communicated his intentions or made a final decision.
Comcast would not be required to make a new announcement about walking away from the main Fox assets, according to the sources, who asked not to be identified because the deliberations are confidential. It would be very difficult for Comcast to press on a new bid if it did not come this week, according to the sources.
Fox declined to comment. Comcast and Disney did not immediately respond to requests for comment.
A new bid from Comcast for the Fox assets, which include its movie studio and several TV networks, would stretch the cable operator’s finances, given that it has also offered $34 billion to acquire 61 percent of European broadcaster Sky Plc. Fox, which owns 39 percent of Sky, has been also seeking to acquire the majority stake.
Comcast has also been seeking to convince Fox and investors that regulators would approve its bid for the main Fox assets after U.S. Department of Justice gave the green light to Disney’s bid for them. However, the Justice Department’s decision last week to appeal against the loss of its challenge to AT&T Inc.’s takeover of Time Warner Inc. served as a reminder that risks persist of antitrust measures.
Walking away from the main Fox assets would give Comcast less negotiating leverage with Disney and Fox to end the bidding war for Sky. Several analysts have suggested that the two bidding wars for the main Fox assets and Sky could have been resolved with some kind of grand bargain between Comcast and Disney.
The fight between Disney and Comcast has been part of a bigger battle being waged in the entertainment industry as the growth of Netflix and Amazon force the world’s traditional media giants to spend tens of billions of dollars to keep pace..
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