Comcast is seeking to raise tens of billions of dollars in financing for a possible new offer for 21st Century Fox entertainment assets that the Walt Disney has agreed to purchase for $52 billion, according to a Reuters report.
Comcast declined on Tuesday to comment.
Raising the funds indicates the resolve by Comcast CEO Brian Roberts to do a deal despite rejections from media mogul Rupert Murdoch, who has controlled 21st Century Fox since late 2017.
Comcast’s bridge financing is another step in an unfolding drama in the United States and Europe as the telecom and pay-TV business restructures itself in response to Netflix and to Murdoch’s decision to carve off significant parts of his media empire and sell them.
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Comcast already has made a formal unsolicited $31 billion offer in Europe for Sky satellite-TV business, which is partly controlled by Murdoch.
Comcast is reportedly arranging $60 billion for an offer for the Fox assets and Sky, the report said. If the deal goes through, Comcast could become America’s largest corporate borrower and its credit ratings could reach the bottom edge of investment grade, Bloomberg reported.
“We still think Comcast will face a stiff fight for Fox and Sky and will likely end up with neither,” Jonathan Chaplin, the managing partners New Street Research, said Tuesday. He added that if Comcast acquires Fox, it might lead to Comcast’s spinning off its cable/internet and entertainment businesses into separate companies.
This, Chaplin said, “would be the best of all possible outcomes.
Murdoch agreed to sell U.S. entertainment assets — though not the highly profitable Fox News Channel — to Disney, rejecting a higher offer for those assets from Comcast.
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Murdoch was concerned about the reaction of federal regulators to a deal with Comcast. Comcast already owns NBCUniversal, a huge entertainment conglomerate.
But regulatory fears could wane if a federal judge allows AT&T Inc. to acquire HBO-owner Time Warner.
The Justice Department has opposed the $85 billion AT&T deal for Time Warner on antitrust grounds, saying it could harm consumers through higher prices for television services and entertainment. A trial over the deal in Washington, D.C. — which included the testimony of two Comcast officials — recently concluded.
The judge is expected to make a decision by mid-June.
Some think that if the judge agrees to allow AT&T to acquire Time Warner, Comcast could make a hostile bid for Fox assets because it would be more likely that a Comcast/Fox deal would be approved by regulators.