Comcast Corp on Wednesday offered US$65 billion to lure Twenty-First Century Fox Inc away from a merger with Walt Disney Co, saying its all-cash bid was about 19 percent higher and launching the first salvo in what could be a bidding war between two of the largest US media companies.
Comcast chief executive officer Brian Roberts said he is confident regulators would allow a Comcast-Fox deal after AT&T Inc’s court victory on Tuesday, which allowed it to buy Time Warner Inc for US$85 billion.
Some analysts see some difficulties for Comcast-Fox, which would add Fox’s movie and television studios to Comcast’s NBC Universal, but Roberts said in a letter to Fox that he would offer the same conditions as Disney and promised to fight for the deal in court if necessary.
Comcast is expected to lead a wave of traditional media companies trying to combine distribution and production to compete with Netflix Inc and Alphabet Inc’s Google.
The younger firms produce content, sell it online directly to consumers and often offer lucrative targeted advertising.
Comcast in a statement outlined an offer that was similar to Disney’s, including a commitment to the same divestitures. It said that it would agree to litigate any action taken by the US Department of Justice to block the deal.
Comcast offered US$35 per Fox share for the media assets, compared with Disney’s stock offer, worth US$29.18 per share at the close of trade on Wednesday.
Comcast offered a US$2.5 billion reverse termination fee if the deal did not go through, the same as Disney. It also offered to pay Fox’s US$1.525 billion breakup fee owed to Disney, if Fox went with Comcast.
Comcast said it intends to pursue its US$30 billion acquisition of Sky PLC in parallel with its Fox bid. Comcast bid for Sky in April, after Fox’s bid for the remainder of the European pay-TV group it did not already own was delayed by regulators.
Justice Department lawyers who tried to stop AT&T’s US$85 billion deal expect consumers will lose out as bigger companies raise prices, and some lawyers see that as a concern in a Comcast-Fox deal, which would put two movie studios and two major television brands under one roof.
“One cannot ignore the fact that there’s less independent content to go around,” after the AT&T deal, said Henry Su, an antitrust expert with Constantine Cannon LLP.
Comcast might have a tough time winning over Fox’s largest shareholder, Rupert Murdoch’s family. They own a 17 percent stake and would face a multibillion dollar capital gains tax bill if he accepts an all-cash offer from Comcast, tax experts have said.
NOT ALL GOOD: Analysts warned that other data for last month might be less rosy due to the virus and analysts expect the PMI to contract again next month Chinese factory activity saw surprise growth last month as businesses went back to work following a lengthy shutdown, but analysts said that the economy faces a challenging recovery as external demand has been devastated by the COVID-19 pandemic, while the World Bank said that growth could screech to a halt. China is slowly returning to life after months of tough restrictions aimed at containing the virus, which put millions of people into virtual house arrest and brought economic activity to a near standstill. The strict measures saw a closely watched gauge of manufacturing plunge to its lowest level on record in February,
The output of the global smartphone industry this year is to contract by 7.8 percent on an annual basis as the COVID-19 pandemic ushers in a global recession, Taipei-based market researcher TrendForce Corp (集邦科技) said in a report on Monday. The global production of smartphones is expected to fall to 1.29 billion units, as the pandemic dampens demand for consumer electronics, leading to a decline in shipments across Europe and North America, TrendForce said. With consumers delaying smartphone purchases and thereby lengthening the device replacement cycle, overall prices would suffer a setback that is expected to negatively affect the profitability of smartphone
ELECTRONICS Lite-On delays sale of unit Lite-On Technology Corp (光寶科技) yesterday said it would postpone the sale of its solid-state drives (SSD) business to Kioxia Holdings Corp, formerly known as Toshiba Memory Holdings Corp, due to disruptions amid the COVID-19 pandemic. Last year, the Taiwan-based electronics components supplier struck the deal with the Japanese firm, agreeing to sell the unit for US$165 million. Citing unfinished integration work due to the pandemic, Lite-On has deferred today’s closing date until further notice, adding that the delay would not have a negative effect on the unit’s operations. AUTO PARTS Hiroca approves dividend Automotive interior parts supplier Hiroca
ALL ABOUT STRATEGY: The company is optimistic, saying that its gross margin should increase year-on-year, but it is scaling back on its plans to expand capacity Quang Viet Enterprise Co (QVE, 廣越), which makes down jackets and garments for sportswear and outdoor brands including Adidas AG, yesterday said that revenue might drop 5 to 10 percent annually this year as some customers trimmed orders in response to the COVID-19 pandemic. That would mark its first revenue decline since 2016. Quang Viet posted record-high revenue of NT$16.26 billion (US$537.45 million) last year, up 22 percent from 2018. Down jackets made up 40 percent of it revenue last year. North Face Inc and Patagonia Inc are this year likely to reduce orders by 20 to 30 percent from a