Comcast dropped its $66 billion bid for 21st Century Fox’s entertainment assets on Thursday and said it would press on with its bid for European broadcaster Sky, which Fox partly owns.
Comcast’s withdrawal is a concession to Walt Disney, which last month sweetened its offer for the Fox assets to $71.3 billion.
It de-escalates one of the media industry’s most high-profile confrontations, which pitted Comcast CEO Brian Roberts against Fox Executive Chairman Rupert Murdoch and Disney CEO Bob Iger.
Disney did not immediately reply to a request for comment.
However, it still leaves open a potential bidding war for Sky, which is 39 percent owned by Fox.
Fox also has made an offer for the 61 percent of Sky it does not own, although Comcast currently is the highest bidder, with an offer worth $34 billion, for the London-listed pay TV group.
One of the reasons Comcast dropped its bid for the Fox assets is because that bidding war was inflating the value of Sky, given its partial ownership by Fox, according to sources familiar with the company’s thinking.
Based on Fox’s partial ownership of Sky, Britain’s takeover regulator last week set the floor for a new Disney bid at 14 pounds per share — about $18.18 — which is below Comcast’s latest bid. The regulator is set to revisit that decision on July 27, and Disney is waiting until then for its next move, according to the sources.
Immediately before the acquisition by Disney, Fox will separate the Fox Broadcasting network and stations, Fox News Channel, Fox Business Network, its sports channels FS1, FS2 and the Big Ten Network, into a newly listed company that it will spin off to its shareholders.
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The bidding between Comcast and Disney is part of a bigger battle being waged in the entertainment industry as the world’s media giants splash out tens of billions of dollars on deals to be able to compete with Netflix and Amazon.com.
While an acquisition of Britain’s Sky, a broadcaster of sports, films and TV shows to 23 million homes across Europe, would significantly diversify Comcast’s business overseas, it would do little to give it scale outside its core U.S. market.
Comcast was drawn into a bidding war for Fox because of the scarcity of big media assets up for sale, given that the industry is dominated by powerful families and personalities reluctant to cede control. CBS and Viacom, for example, are tightly controlled by the Redstone family.