Theoretically, there will be no better time for Comcast, Disney along with Fox to work out a deal than Sun Valley, Idaho, where media titans meet annually to talk about mega-mergers under the watch of boutique investment company Allen & Co.
along with yet, like the phrase “water water everywhere, Nor any drop to drink,” Comcast CEO Brian Roberts will be in a difficult position — he can’t talk to Disney executives to broker a deal for Fox because Disney along with Fox have a signed merger agreement. in which prohibits Disney by talking to Comcast about potentially splitting up Fox’s assets along with avoiding a major bidding war, which has already sent the cost of Fox assets up about $20 billion.
Comcast has been waiting for weeks to strike back at Disney’s $71.3 billion offer for Fox’s bundle of assets. Earlier Wednesday, Fox increased its bid to buy the 61 percent of U.K. pay-TV provider Sky to $32.5 billion, topping Comcast’s outstanding bid of about $31 billion.
Instead of rebidding for all of the Fox assets, Comcast will be currently focused on increasing its bid for Sky, according to a person familiar with the matter. Before in which happens, Fox actually may need to improve its latest bid again. in which’s because a U.K. takeover panel will be deciding if Sky will be 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 in which Fox already owns (along with Disney will be bidding for as part of its $71.3 billion offer). Assuming Fox agrees to pay a higher mandated cost for Sky, Comcast would certainly then increase its bid over in which cost, the person said.
In fact, Comcast may be reassess its bidding strategy for the remainder of Fox if the item walks away with Sky, the person said. If Comcast bids again for Fox, the takeover panel may force the item to pay even more for Sky, which would certainly not make sense if the item’s already won the asset. Comcast would certainly be bidding against itself.
This specific may be Comcast’s attempt at “talking” to Disney, since Roberts can’t bang out a deal with Disney CEO Bob Iger along with Fox Executive Chairman Rupert Murdoch at the Sun Valley Resort bar. If Comcast can convince Disney to give up on Sky, the item can throw Disney a bone by backing off on the rest of Fox’s assets. the item’s always been the closest outcome to a “win-win” for both sides.
What’s unclear will be if Disney will be willing to cede Sky. Iger has consistently emphasized how much Disney loves Sky’s platform along with user interface. To “talk back” to Comcast, Disney would certainly have to get the message out in which the item wouldn’t bid again on Sky, perhaps through a public statement. in which may give Comcast the security the item needs to back away on the rest of Fox’s assets.
Part of in which bundle of Fox assets will be the remaining 39 percent of Sky. Disney could decide the item wants to tender into Comcast’s offer for Sky, allowing Comcast to own 100 percent of Sky along with lowering the overall cost (along with debt burden) for Fox’s assets. After divesting Fox’s regional sports networks along with agreeing to divest additional assets up to $1 billion of earnings before interest, tax, depreciation along with amortization, Disney’s acquisition could be a lot easier for shareholders to swallow.
So the probable next steps are:
- U.K. takeover panel rules on value of Fox’s Sky offer
- Comcast tops Fox’s offer for Sky
- Disney decides if the item wants to signal to Comcast in which the item will drop Sky in return for Comcast throwing inside towel on the rest of the Fox assets.