21st Century Fox Assets

Comcast bids $65 billion for 21st Century Fox assets, topping Disney

• Comcast, the parent of CNBC, offered Fox shareholders $35 a share in cash and 100 percent of the shares the company left behind after the deal.
• The deal is a 19 percent premium to the value of Disney's offer as of noon on Wednesday.
• The announcement comes one day after a federal judge cleared the way for AT&T's megadeal for Time Warner, a decision that is expected to unleash a wave of big mergers.

Alex Sherman | Liz Moyer

Comcast announced a $65 billion bid for Twenty-First Century Fox units that are currently in an agreement to be acquired by Disney.


The bid, announced Wednesday, represents a 19 percent premium to Disney's offer. Comcast, the parent of CNBC, offered $35 a share in cash.

Disney agreed in December to buy the majority of Fox for $52.4 billion in stock. The deal included Fox's movie studios, networks National Geographic and FX, Star TV, and stakes in Sky, Endemol Shine Group and Hulu, as well as regional sports networks.


Scott Eells | Bloomberg | Getty Images
Brian Roberts, chairman and chief executive officer of Comcast Corp.

The assets would increase Comcast's international footprint and boost its entertainment portfolio at a time when it's facing pressure in its video business as more consumers cut the cord and turn to internet-delivered video services like Netflix.

"These are highly strategic and complementary businesses, and we are in our minds the right buyer," Comcast's CEO Brian Roberts said on a call with investors.

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In a letter to Fox's board and members of the Murdoch family released earlier, Roberts said, "We were disappointed when [Fox] decided to enter into a transaction with The Walt Disney
Company, even though we had offered a meaningfully higher price." He went on to say, "We are pleased to present a new, all-cash proposal that fully addresses the Board's stated concerns with our prior proposal."

Comcast is planning for an increased bid from Disney that may include a cash component, according to people familiar with the matter. Comcast believes it is better suited to offer cash because the market allows for a higher leverage ratio from a cable company with strong cash flows than a media company like Disney, which is accustomed to carrying lower leverage ratios, the people said. A Disney bid with cash will also diminish the tax benefits for the Murdoch family, which controls Fox.

AT&T approval cleared the way

The long-awaited bid comes a day after a federal judge cleared AT&T's $85 billion takeover of Time Warner, a deal the government had tried to block on competition grounds. AT&T's win in the court case is expected to usher in a wave of big mergers as companies look for new ways to combine.

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Comcast feels confident of its chances to get a deal passed by U.S. regulators after AT&T's deal was approved yesterday, according to people familiar with the matter. Comcast is willing to divest Fox's regional sports networks and even Fox's portion of Hulu, if necessary, the people said. While Comcast would like to keep the Fox stake in Hulu if possible, and thinks it should be able to, it would consider dropping down closer to 50 percent if necessary, one of the people said. Comcast, Fox and Disney all own 30 percent of Hulu. Time Warner owns the other 10 percent.

Asked about Hulu on the investor call, NBCUniversal CEO Steve Burke said, "We think that's a very important part of this deal," adding that Comcast would be interested in investing in and growing the streaming service in the future.

Comcast also pledged to offer the same $2.5 billion reverse termination fee Disney already agreed to and has offered to reimburse the $1.525 billion break-up fee that Disney would have to pay if it doesn't complete its deal.

In the media world, cable and telecommunications giants like Comcast are looking to add capabilities in creating the content they distribute across their networks. Viacom and CBS have also been dancing around a deal that would marry cable networks and the Paramount Pictures film studio with CBS's networks and local television stations.


---CNBC's Anjali Robins contributed to this report.