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Comcast is expected to focus on the purchase of Sky while Disney takes the rest of 21st Century Fox's assets that are at the center of a bidding war between media giants. This is the opinion expressed by Moody's Investor Service in a report released Friday on the consequences of escalating the battle between Disney and Comcast.
Moody's, the debt rating agency, sees a compromise approach to the debt ratios of Disney and Comcast. Comcast and Disney have both submitted bids for most of 21st Century Fox. Comcast has separately made a $ 31 billion bid to buy Sky, the European satellite platform. Fox currently owns 39% of Sky, a stake that is part of Disney's latest $ 71.3 billion deal for Fox
"From a strategic point of view, we believe that a Disney wedding -Fox is a Comcast-Fox combination "Neil Begley wrote in the report. "Disney's ability to monetize IP in all of its business areas is unparalleled in the industry." A Comcast-Sky wedding has a strategic meaning because both are Pay TV providers and Comcast is a cable distributor first, second content company. "
The Moody's report suggests that Disney and Comcast could trade the auction resolution that gets resolved. has been preparing since last autumn. The Fox sale will also include Fox's 30% stake in Hulu, the streaming platform owned by Disney and Comcast, which means that Disney or Comcast will eventually own a majority stake in Hulu. 19659002] Moody's suggests that Disney could swap the 39% stake in Sky that she will inherit from Fox for Comcast's 30% stake in Hulu. The complexity of these interests could be the cornerstone of an agreement.
"This could also offer an opportunity, however, since Disney and Comcast could agree on an asset swap in which Comcast receives the 39% stake in Disney's Sky and Disney receives the participation of 30 % in Comcast's Hulu, which mitigates the governance issues that could arise with the shared ownership of these assets, "wrote Moody's
if Comcast acquired Fox and Sky, its debt-to-earnings ratio. would reach a high multiple of 4.4, according to Moody's estimates. If Comcast buys only Sky, its debt would be more manageable 2.9 times the profits. If Disney bought both Fox and the rest of Sky, his debt would reach a multiple of 4 times the profit, which remains high. If Disney only bought Fox, the ratio would be 3.5 times the profit, according to Moody's.
Although Sky and its reach in the UK and Europe are a big part of the Fox case appeal for Disney and Comcast, Moody's observers believe Disney should face pressures to pay more for Sky now that Disney has increased its offer for all of Fox, including 39% stake in Sky. Under British law, Disney will have to bid for the rest of Sky if it succeeds in buying out Fox's stake. To further complicate matters, Fox is also trying to close its long-standing deal in order to buy the remaining shares in Sky, although this has been complicated by the competing bid that Comcast has submitted in April.
Moody's suggests that Disney "We believe that Fox and Sky are autonomous transforming assets that would better position Disney and Comcast in the face of changing consumer behavior around content consumption", Moody's writing. "A scenario in which Disney could acquire Fox, and Comcast were able to acquire Sky would be the most desirable outcome for bondholders of all businesses and will likely avoid one or the other becoming one of the world's most indebted non-financial corporations.However, the opportunity of most of Fox's important assets, as well as the absence of other comparable targets, means that the spirits Rationals will have to triumph over the emotion for the stockholders and bondholders of both companies to come out winners. "
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