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story.lead_photo.caption Specialist Gregg Maloney (center) works with a trader Wednesday at the post that handles AT&T and Walt Disney shares at the New York Stock Exchange. Disney stock was up slightly as Comcast’s continued to sag as both pursued 21st Century Fox properties.

Comcast on Wednesday offered about $65 billion to purchase the bulk of 21st Century Fox's businesses, setting up a showdown with Walt Disney Co. for Rupert Murdoch's media empire.

The all-cash bid by Comcast, the largest cable company in the United States, came a day after a federal judge approved a merger between AT&T and Time Warner. Comcast executives had awaited the decision in that case before mounting their bid for 21st Century Fox.

Disney struck a $52.4 billion deal for Fox's assets in December. Comcast, whose roughly $60 billion offer for the Fox assets was rebuffed last year, is now including contractual assurances such as a reverse breakup fee -- worth about $2.5 billion -- in the event a transaction is blocked by the government.

If the Comcast bid succeeds, a major cable distributor would control even more channels on its lineup and those of its rivals. Critics worry that could lead to higher cable bills or make it more difficult for online alternatives to emerge, though there is not yet evidence of either happening after other mergers. A successful Comcast bid also could make Disney's planned streaming service less attractive.

Comcast's new offer is about 19 percent higher than Disney's proposal, according to its statement. The bid is unlikely to be the last to be announced in the industry in the coming months, given the government's failed attempt to stop AT&T's purchase of Time Warner. Media and entertainment stocks soared Wednesday on speculation about a wave of consolidation in the industry.

Murdoch and his company's board rejected Comcast's earlier offer partly on concerns the government would block the deal. But the AT&T-Time Warner decision allayed many concerns that a Comcast takeover of 21st Century Fox's businesses would be denied by regulators.

Brian L. Roberts, the head of Comcast, needed to move quickly. Fox shareholders are scheduled to vote on the Disney deal July 10, but that date will be moved back if Murdoch and the Fox board decide to support Comcast's offer. Disney would then have five days to respond with a counter bid.

Disney hopes to purchase Fox to help it build a stable of content as it competes with tech giants like Netflix and Amazon, populating its own streaming service with as many proprietary shows and movies as possible.

"We're excited about this extraordinary opportunity to significantly increase our portfolio of well-loved franchises and branded content to greatly enhance our growing direct-to-consumer offerings," Disney chief Robert Iger said at the time of the Disney-Fox announcement.

A Disney and Fox deal wouldn't face the same issues as the AT&T-Time Warner deal because Disney isn't a television distributor. But if Disney gets Fox, the combined movie studios would account for 45 percent of worldwide box office revenue, according to BTIG analyst Richard Greenfield. That could raise regulatory objections. A larger studio could use its power to keep its movies in more theaters for longer, dampening competition from rival studios.

For its part, Comcast wants content that can help it beef up its own digital offering -- possibly via the Internet streaming service Hulu, in which it would own a majority stake if it purchased Fox. Experts believe it also could use some film franchises and that it urgently needs an international presence.

"For Comcast, this is a must-win," Greenfield said. "Fox is its only real shot for it to become a global company."

The businesses Murdoch has agreed to sell include the film and TV studios, almost two dozen regional sports channels like the New York Yankees' YES Network, a lineup of cable channels that includes FX, and a 30 percent ownership stake in Hulu.

Comcast already owns film and TV studios, broadcast and cable TV operations including NBC and the USA channel, and the Universal Studios theme parks.

The key attractions for Comcast are Fox's broad international assets, which include its 39 percent stake in the European pay-TV operator Sky and Fox's control of Star, one of India's largest media companies.

Murdoch's overseas business accounts for 27 percent of annual sales, about $7.8 billion. Comcast draws only 9 percent of its revenue from foreign agreements.

Comcast has already made an offer to buy the other 61 percent of Sky in a separate deal. The Fox News cable channel, the Fox broadcast stations, the Fox Business Network and the sports channel FS1 would not be part of a transaction.

Comcast investors haven't welcomed the company's appetite for megadeals. Its shares were down 19 percent this year through Wednesday. If Comcast buys Fox and Sky, the cable giant could become one of America's largest corporate borrowers, and its credit ratings may teeter at the bottom edge of investment grade.

Information for this article was contributed by Edmund Lee and Brooks Barnes of The New York Times, Steven Zeitchik of The Washington Post, Gerry Smith of Bloomberg News and Mae Anderson of The Associated Press.

A Section on 06/14/2018

Print Headline: Comcast puts up $65B in new bid for Fox assets

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