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What began as a mere offering late in 2016 by Rupert Murdoch's 21st Century Fox Inc. for the role of Sky Plc, has not yet sparked a transcontinental auction war when Walt Disney Co. and Comcast Corp. British broadcaster. Fox soon found himself in a tussle between rival bidders, Disney and Comcast. Disney won – its shareholders approved a $ 71 billion merger with Fox's entertainment assets – and while Comcast threw the sponge on Fox, she still covets Sky. In one of the most intriguing moments of a global media battle, Comcast faces Disney / Fox at an auction for the European Pay TV company. The Disney-Comcast-Fox-Sky drama is coming to an end, but few expect it to be the final act in a changing media landscape.
1. What drives these huge media offers?
Two giants of entertainment, Disney and Comcast, were fighting for Fox for a big reason: the broadcast on the Internet. The movies, TV shows and other entertainment offered by Netflix Inc., Amazon.com Inc. and Hulu have become so popular that Americans are abandoning cable TV subscriptions in droves, pushing the profits of media companies. Owning Fox will give Disney iconic entertainment assets – from "The Simpsons" to the "X-Men" franchise – that could make its TV streaming services more appealing. Fox's 30% stake in Hulu would also give Disney a majority stake in one of Netflix's few real competitors, each of which already owns 30% of Hulu.
2. Why does Sky attract so much attention?
Sky's 23 million customers in five European countries would give Comcast or Disney a rare opportunity to diversify outside the United States and reach more consumers directly. Sky has a market-leading platform, its Q box, which Comcast CEO Brian Roberts says "very impressed." Sky also offers a range of television content sought to attract and retain subscribers. . Among the assets he seeks to acquire from Fox, Disney's CEO, Bob Iger, has called Sky a "true jewel of the crown."
3. What put Fox on the line?
The Murdoch family wanted to sell part of the global empire assembled over three decades. On June 20, Disney brought back its offer to buy Fox's assets to $ 71.3 billion in cash and shares, up from $ 52.4 billion. The agreement, which Fox accepted and the shareholders approved in July, includes 20th Century Fox film and television production company, Star India, an American cable channel like FX and National Geographic, and 39% of Fox in Sky. Disney has launched its offer – it will also assume nearly $ 14 billion of Fox's debt – to replace Comcast's $ 65 billion offering. Fox preferred Disney because he thought the stock was more valuable, and he feared that an agreement with Comcast would run into regulatory problems.
4. What happens next with Sky?
The contest will be held on September 22 as part of a three-day auction, overseen by the US Acquisitions Regulator. Comcast's bid of 14.75 pounds ($ 19.30) per share is greater than 14 pounds per Fox share, so Fox will be able to answer that with a first offer, and then Comcast will have the opportunity to counter, then both parties will have the opportunity to make an additional bid at the end of the day, which the takeover committee will reveal "as soon as possible". Sky's shareholders will likely choose the higher turnover to maximize their returns, but they will have two weeks. to decide. In a heat wave, Comcast faces a higher bar to conquer them, since Fox already owns 39% of Sky.
5. What about regulatory problems?
Comcast had been waiting to make a formal offer on Fox's entertainment assets until the fate of another so-called vertical agreement, combining programming and distribution powers, be decided: the attempt of ########################################################################## AT & T Inc. to acquire Time Warner Inc. had attempted to block for antitrust reasons. A federal judge has authorized AT & T to obtain antitrust clearance to acquire Time Warner, but the United States has appealed. Disney gained an advantage over Comcast when it got US antitrust approval for its purchase of Fox's assets.
6. What could the end game look like?
Regardless of the American giant, Europe's largest pay-TV company, with its content and direct consumer technology, will win. Disney could integrate London-based assets into its entertainment empire, including the ESPN sports service and new streaming offerings. If Comcast is required, the Philadelphia-based giant will look for synergies with its NBCUniversal news and entertainment industry and its huge cable broadband business.
7. What about the Murdoch dynasty?
He is cutting himself. The family will still control a broadcast network, a cable TV channel, a commercial news channel and Fox News. The Murdoch family controls separately News Corp., which, besides the British newspapers, also owns the Wall Street Journal and the HarperCollins book publisher. The Murdochs also hold a stake of more than 4% in Disney, ranking them among the largest shareholders.
– With the help of Samuel Dodge, Anousha Sakoui, Christopher Palmeri and Thomas Seal.
To contact the reporters on this story: Joe Mayes in London at [email protected], Gerry Smith in New York at [email protected]
To contact the editors responsible for this story: Rebecca Penty at [email protected], Paula Dwyer, Kevin Miller
© 2018 Bloomberg L.P.
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