U.S. cable operator Comcast Corp is speaking to investment banks about obtaining bridge financing for an all-cash bid to displace Walt Disney Co on its $52 billion deal to acquire most of Twenty-First Century Fox Inc’s assets, three people familiar with the matter said on Monday.
The move is the first concrete step that Comcast is taking to upend Disney’s deal with Fox. It sets Comcast Chief Executive Brian Roberts on a collision course with two other media industry titans, Fox Executive Chairman Rupert Murdoch and Disney CEO Bob Iger.
Comcast, owner of NBC and Universal Pictures, has already made a 22 billion pound ($30 billion) offer to acquire the 61 percent stake in European pay-TV group Sky Plc that Fox does not already own. In doing so, it topped an earlier offer for the entirety of Sky by Fox.
Comcast is asking investment banks to increase the bridge financing facility they have already arranged for the Sky offer by as much as $60 billion to finance the Fox bid, the sources said.
Comcast is waiting for a judge to rule next month on the U.S. Department of Justice’s challenge to telecommunications provider AT&T Inc’s planned $85 billion acquisition of media conglomerate Time Warner Inc before it submits an offer to Fox, the sources said.
Fox rejected an offer from Comcast last year largely due to antitrust concerns, and Comcast plans to make a new offer only if AT&T and Time Warner prevail in court, the sources added.
The sources asked not to be identified because the matter is confidential. Comcast, Fox and Disney did not immediately respond to requests for comment.
Fox shares rose 5.13 percent to $39.99 on the news in after-hours trading in New York on Monday. Comcast shares were down 1.5 percent to $31.90, while Disney shares were down 0.5 percent to $102.00.
Disney clinched an all-stock deal in December to acquire Fox’s film, television and international businesses, giving the world’s largest entertainment company an arsenal of shows and movies to combat growing digital rivals Netflix Inc and Amazon.com Inc.
Murdoch, who owns close to a 17 percent in Fox and also has voting control, had a preference at the time for a stock deal, because it made the transaction non-taxable at a Fox shareholder level. It is not clear how receptive he would be to an all-cash offer by Comcast.
Comcast’s stock has dropped since then, from around $38 to about $32 now, giving the company a market capitalization of $149 billion.
