Comcast Pulls Offer for Fox Assets, Ending Bidding War With Disney

Posted July 19, 2018 3:52 p.m. EDT
Updated July 19, 2018 3:54 p.m. EDT

Cable and broadband giant Comcast said Thursday it was abandoning its bid to acquire a major chunk of 21st Century Fox but would continue its push to win control of the British satellite broadcaster Sky, a move that ended a complex bidding war for Rupert Murdoch’s media company.

In a statement, Comcast said it “does not intend to pursue further the acquisition of the Twenty-First Century Fox assets and, instead, will focus on our recommended offer for Sky.”

Comcast had been locked in a battle with The Walt Disney Co. for the bulk of Murdoch’s Fox empire, with the cable company submitting a $65 billion offer for the assets last month. But Disney brushed back Comcast’s offer with a higher bid of $71.3 billion, which Murdoch and his board quickly accepted. Shareholders for both Disney and Fox will vote on the proposed merger on July 27.

The cable giant had already started to move off a Fox deal a few weeks ago to focus on acquiring control of Sky, which, with more than 23 million customers across five countries, is one of Europe’s most prized media companies. Comcast had initially been drawn to Fox primarily for its international holdings, which include a 39 percent ownership stake in the satellite TV service. Now Comcast and Fox are bidding for the other 61 percent of the company.

The Philadelphia-based Comcast leads the bidding for Sky, having topped Fox’s last offer with a bid that values the broadcaster at $34 billion, or 26 billion pounds. Sky’s independent board had already recommended Comcast’s new terms.

Brian L. Roberts, chief executive of Comcast, praised Murdoch and the Disney chief executive, Robert A. Iger, on their deal. “I’d like to congratulate Bob Iger and the team at Disney and commend the Murdoch family and Fox for creating such a desirable and respected company,” he said in a statement.

The note was a friendly signal in what had become a contentious corporate showdown being waged across two continents and involving two different transactions totaling more than $100 billion in value. Roberts’ statement also was perhaps a way to telegraph a bigger-picture scenario to Disney: you get Fox, I get Sky. Of course, Iger also covets Sky and its international reach, having called the broadcaster a “crown jewel.”

Iger, in his own statement, said he was “extremely pleased with today’s news,” adding that his company’s enthusiasm for the deal “has continued to grow as we’ve come to know 21st Century Fox’s stellar array of talent and assets.” Fox did not immediately respond to a request for comment.

If Disney and Fox shareholders agree to the merger, the combined company would own film studios that command nearly 50 percent of the North American box office this year. It would also own 60 percent of streaming provider Hulu, which has over 20 million customers. The new Disney-Fox company would also retain a 39 percent stake in Sky.

If Comcast succeeds in winning control of Sky, another possibility could emerge, according to two people familiar with both companies who spoke on condition of anonymity because they were not authorized to speak publicly. The cable giant owns a 30 percent share of Hulu, which it could sell to Disney, giving it 90 percent of the streaming service. Disney, in turn, could sell the 39 percent share of Sky to Comcast.