Disney wins approval for Fox deal in blow to Comcast

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Credit: Alexander F. Yuan/Bloomberg

Walt Disney Co. won U.S. antitrust approval for its $71 billion purchase of 21st Century Fox's entertainment assets, raising hurdles to a potential rival bid from Comcast Corp.

Disney agreed to sell Fox's regional sports networks to resolve the Justice Department's concerns that the deal would raise prices for pay-TV companies, according to court filings made Wednesday in New York.

The approval is a victory for Disney in its battle with Comcast for one of the media industry's biggest prizes. Fox last week accepted a sweetened bid from Disney, which upped its offer following Comcast's competing $65 billion bid. The $38-a-share price is about $10 a share higher than what Disney offered in December and $3 above Comcast's bid.

Comcast is now mulling its next steps, including possibly teaming up with private equity investors in its pursuit of Fox assets, a person familiar with the situation said. The Wall Street Journal reported that if the bidding reaches a high enough level—say, $90 billion—the company may go to private equity firms or other backers for help. In one scenario cited by the newspaper, a strategic investor could take on Fox's U.S. assets—including the 20th Century Fox studio and regional sports networks—and leave Comcast with overseas assets.

The Disney-Comcast contest will determine who controls much of Rupert Murdoch's empire, including Fox's movie and TV studios, television networks such as FX, and multichannel providers like Star India and Sky. At stake is a trove of media properties ranging from "The Simpsons" to "X-Men."

Disney and Comcast are looking to use the Fox assets to bolster their content, expand overseas and fend off the threat from Netflix and other streaming upstarts. That threat prompted AT&T to buy Time Warner, a deal the government unsuccessfully tried to block.

Disney and Comcast have traded jabs over which bid would face an easier path to regulatory approval, an important consideration for Fox stockholders, who must weigh which deal to accept. A July 10 Fox shareholder vote on the Disney deal was postponed to a "future date" to allow more time to evaluate Disney's new offer.

When Comcast made its bid for Fox, Comcast CEO Brian Roberts said in a letter to Murdoch and his sons that he is "highly confident" that Comcast will "obtain all necessary regulatory approvals in a timely manner and that our transaction is as or more likely to receive regulatory approval than the Disney transaction."

-- Bloomberg News

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