One of the biggest stories hitting the tape in the market today has to do with the end of a drawn out battle. News is breaking that Walt Disney Co (NYSE: DIS) will acquire assets for Twenty-First Century Fox Inc’s (FOXA) entertainment assets after Comcast Corp (CMCSA) dropped out of the bidding war.
Comcast Concedes To Walt Disney
News is breaking that Comcast has dropped its $66 billion bid in a bidding war to purchase Twenty-First Century Fox’s entertainment assets. As a result, the only company left in the bidding war is Walt Dinsey, meaning that DIS will take the assets. Of course, the deal is pending acceptance from Fox, finalization and customary closing conditions. Nonetheless, for the time being, it seems as though Disney will be the big winner. Ultimately ending one of the biggest bidding wars the entertainment industry has seen.
Another Bidding War Continues
While Comcast has conceded to Walt Disney in the battle for Twenty-First Century Fox’s assets, there is another battle brewing. Both companies have made bids with an attempt to takeover the European broadcaster, Sky Plc (SKYB). Through the acquisition, Comcast is looking to increase his international footprint.
Things Get Even More Interesting
When we dig into the ownership of Sky, things start to become more interesting. In order to purchase Sky, Comcast will have to outbid Fox. Considering that Disney is likely to purchase Fox’s entertainment assets for massive amounts of money, if Fox really wanted to, it would have the cash it needs in order to win the bidding war for Sky.
Not to mention, Fox currently owns 39% of Sky, giving it even more skin in the game when it comes to the acquisition of the company. Nonetheless, the Comcast bid of $34 billion is currently the highest bid on the table.
Nonetheless, when it comes to the takeover of Sky, we’re on hold, waiting on Britain’s takeover regulator. Last week, the regulator set the floor for a new Disney bid at 14 pounds per share, which is a bit below Comcast’s latest bid. Nonetheless, the regulator is expected to look at this decision again on July 27th. Considerin this, Disney is likely to wait until this news breaks before making its next move.
Nonetheless, some suggest that Disney isn’t likely to win this takeover battle. At the end of the day, with the takeover of Fox’s entertainment assets, many believe that the massive amount of debt at DIS could hamper its ability to move forward with yet another bidding war. Ultimately, with the acquisition of Fox’s assets, the company will have plenty of irons in the fire that will need investments to grow.
So, at the moment, the favorite for Sky is Comcast. With a new bid from Disney being unlikely, and many saying an increased bid from Fox would look like a sign of despiration, it seems like this is the direction it’s going. Nonetheless, it’s not over until an agreement is signed. So, this story will continue to be one to watch.
The Bottom Line
The bottom line here is that today was a big day for entertainment industry acquisitions. With CMCSA Conceding to DIS, it looks like Disney will soon own Fox’s entertainment assets. However, backing out of this bidding war could have been a strong move as it set the stage for a Comcast acquisition of Sky.