Back in February, we reported that Comcast could outbid Disney for Fox. According to many sources this morning, Comcast is now in the process of preparing a $60 billion all-cash bid to knock Disney out of the running on its deal to acquire most of Twenty-First Century Fox’s assets as long as the U.S. government approves AT&T’s acquisition of Time Warner. As of now, Disney’s offer remains at $52.4 billion.
Comcast is also planning to acquire U.K. satellite broadcaster Sky in its entirety as part of an amended all-cash bid.
Should Disney get into a bidding war with Comcast, Comcast’s bid for Sky and Fox could come close to $100 billion.
CNBC reports that Comcast does not plan to submit their bid if the government shoots down the AT&T-Time Warner deal.
Comcast has reportedly “asked investment banks to increase the bridge financing facility they have already arranged for the Sky offer by as much as $60 billion to finance the Fox bid.”
When Comcast first put their bid in for Fox, they touted their powerful stock as one of the reasons that Fox should “accept a deal from the largest U.S. cable provider instead of Disney.”
Comcast shares have fallen about 15 percent since Disney announced their bid for Fox but Comcast feels that they have a better shot at it with an all-cash bid, even if Fox Executive Chairman Rupert Murdoch prefers Disney shares.
Comcast CFO Michael Cavanaugh said on the company’s last earnings call, “Regarding potential acquisitions, it is our job to continuously evaluate whether there are opportunities for us to create value. But should we pursue anything while our stock is at these levels, while circumstances can always change, I think it is unlikely that we would use Comcast shares as a medium of exchange for a transaction.”
Comcast does not feel that Disney could match an all-cash bid for Fox because if they add more stock to the deal, Fox stock will go down, lowering the value of the offer, according to CNBC sources.