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Disney’s bid for Fox assets gains momentum: Sources

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NEW YORK: Walt Disney Co is in the lead to acquire much of Twenty-First Century Fox Inc’s media empire, though rival suitor Comcast Corp remains in contention, people familiar with the matter said on Tuesday.


The Murdoch family, which controls Fox, prefers a deal with Disney because it would rather be paid in Disney than Comcast stock, and expects a potential deal with Disney to be cleared by US antitrust regulators more easily, one source said.


However, no deal between Disney and Fox is imminent and several issues have yet to be fully negotiated, the sources said.


Fox is exploring a potential sale as it has been considered undervalued relative to its peers, said Brian Wieser, an analyst at Pivotal Research.


“At the beginning of this year, Fox was the only buy-rated stock I had because it was so depressed relative to everything else in the sector,” Wieser said.


Fox Chief Executive James Murdoch, speaking at the UBS Global Media and Communications Conference in New York on Tuesday, declined to comment on reports about a potential sale.


”It’s always good to look at what’s going to create the most value for our shareholders,” he told attendees.


CNBC had reported that a deal for Disney to buy Fox’s movie studio and television production assets for more than $60 billion could come as early as next week.


Fox shares were up 0.57 per cent in late afternoon trading, while Disney was down 2.45 per cent. Comcast shares were down 1.56 per cent.


Disney, which has a market value of around $166 billion, would acquire Fox’s FX and National Geographic cable channels, its movie studio, the Star network in India and stake in European pay-TV provider Sky PLC.


Fox anticipates that its deal to buy the remaining 61 per cent stake of Sky, which has been held up by regulators, will be approved in the first half of 2018. Any deal for Fox would include the remaining stake of Sky, sources have said.


Fox would keep its news and business news divisions, its broadcast stations and Fox Sports, the sources said.


It was reported in November that Comcast, which is the largest US cable provider and has a market value of around $188 billion, had expressed interest in Fox assets.


Those assets would offer the opportunity for both Comcast and Disney to broaden their international distribution footprint.


They would also be a source of new content at a time when companies like Amazon.com Inc and Netflix Inc are spending billions to bulk up on programming. Comcast has steadily boosted its ownership of content over the years. — Reuters


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