Comcast Drops Bid for Fox Assets to Focus on Sky Instead

Comcast said on Thursday that it will not make another attempt to pry major 21st Century Fox assets away from Disney, choosing instead to focus on acquiring British pay-TV giant Sky Plc.

“Comcast does not intend to pursue further the acquisition of the Twenty-First Century Fox assets and, instead, will focus on our recommended offer for Sky,” the company said in a statement.

The move clears the way for Disney to acquire the film and TV studios, among other assets, from Fox. “Our incredible enthusiasm for this acquisition and the value it will create has continued to grow as we’ve come to know 21st Century Fox’s stellar array of talent and assets,” said Disney CEO Bob Iger in a statement. “We’re extremely pleased with today’s news, and our focus now is on completing the regulatory process and ultimately moving toward integrating our businesses.”

Also Read: Comcast Increases Bid for Sky to $34 Billion

The two companies had initially agreed to a $54.2 billion deal in December, before Comcast came in with an “unsolicited” offer of $65 billion in June. Disney then sweetened its prior bid to $71.3 billion, which Fox again accepted over Comcast.

“I’d like to congratulate Bob Iger and the team at Disney and commend the Murdoch family and Fox for creating such a desirable and respected company,” Comcast CEO Brian Roberts said in a statement.

Many industry experts had widely expected Comcast to make another bid, but two important developments over the past few weeks may have changed Comcast’s thinking.

Also Read: Comcast Increases Bid for Sky to $34 Billion

First, the U.S. Department of Justice approved the deal between Disney and Fox, provided that Disney sell off the 22 regional sports networks it will gain in the sale. That meant that any new Comcast bid would have to be a “Godfather”-type offer to force Fox to reconsider.

The Department of Justice then filed an appeal of a federal judge’s approval of the $85.4 billion merger between AT&T and Time Warner. Even though the its appeal has a long shot of overturning AT&T-Time Warner deal, it could have lessened the likelihood that Comcast would gain regulatory clearance for its proposed deal for Fox.

Fox has set a July 27 shareholder meeting to vote on the Disney deal. If either Comcast’s or Fox’s acquisition of Sky is not completed by then, Disney would be forced to make a minimum bid of £14 a share for the 61 percent of Sky that Fox doesn’t own. That would be less than the £14.75 per share that Comcast offered last week.

Both companies were vying for a portfolio that includes the Fox film and TV studios, U.S. cable networks including FX and National Geographic, international properties including Sky and Star India as well as Fox’s one-third stake in the streaming service Hulu.

Trey Williams contributed to this report.

9 Biggest Billion-Dollar Entertainment and Media Deals in 2017 (Photos)

While all eyes were on AT&T's $85 billion acquisition of Time Warner, announced in late 2016 but facing an antitrust lawsuit from the Justice Department, there were plenty of other megadeals in media, tech and entertainment that kept investment bankers busy in 2017.

Here are some of the biggest deals of the year:
Getty Images
Disney to acquire most of 21st Century Fox for $52.4 billion

In a massive deal that could change the entertainment industry even more than AT&T-Time Warner, Disney announced plans to acquire Fox's film and TV studios and much of its non-broadcast television business, including regional sports networks and cable networks such as FX, FXX and Nat Geo. Disney would also pick up Fox’s stake in the European pay-TV giant Sky — and be better positioned to win regulatory approval to complete the acquisition of the 61 percent of the company it does not already own.
Discovery Communications agrees to buy Scripps Networks Interactive for $11.9 billion

The merger of two cable powerhouses brings together channels including Discovery, Science, Food Network and HGTV – and could give the combined company a stronger position as pay-TV continues to migrate to the internet.
Discovery/Scripps
Sinclair Broadcast Group agrees to buy Tribune Media for $3.8 billion

This deal, if approved, would give conservative-leaning Sinclair control of 223 stations in 108 markets, including 39 of the top 50, covering 72 percent of households in the country. And it's only possible under rule changes implemented by new FCC Chairman Ajit Pai.
Sinclair/Tribune
Cineworld offers to buy Regal Cinemas for more than $3 billion

After a string of movie theater mergers last year, the sector has quieted down -- along with the box office. And while this isn’t yet a done deal -- or even an accepted offer -- British chain Cineworld made a late November bid of $23 a share for the U.S.’s No. 2 cinema chain.
Cineworld/Regal
Meredith Corp. acquires Time Inc. for $2.8 billion

The magazine megadeal is a sign of changing times in the publishing industry, with the owner of esteemed brands like Time, Fortune and Sports Illustrated selling to the parent of Better Homes and Gardens and Country Life – backed by $650 million from big-time conservative donors the Koch brothers.
Meredith/Time
Verizon acquires Straight Path Communications for $2.3 billion

Straight Path may not be a household name, but it was the subject of a bidding war between AT&T and Verizon. The company is one of the largest owners of millimeter wave spectrum, seen as key to the buildout of 5G networks, which should power much faster mobile internet -- better for video -- in the near future.
Verizon/Straight Path
Disney buys the rest of BAMTech for $1.6 billion

The Mouse House jumped into internet TV in a major way in 2017, announcing upcoming Disney and ESPN-branded streaming services and acquiring the rest of streaming tech company BAMTech to power those products.
Disney/BAMTech
Entercom buys CBS Radio for $1.5 billion

CBS Radio was intended to be spun off from its broadcast parent in an IPO, but instead it was scooped up by a competitor. The combined company, now the second largest radio business in the country, owns and operates 244 stations in 47 markets.
Entercom/CBS Radio
MGM buys the rest of Epix for $1 billion

The independent studio went all in on the pay-TV business, buying the rest of the premium cable network from Viacom and Lionsgate. And that's paid immediate dividends, as MGM's media networks division propelled it to a strong third quarter.
MGM/Epix

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Rewind 2017: Media and content consolidation continued this year

While all eyes were on AT&T's $85 billion acquisition of Time Warner, announced in late 2016 but facing an antitrust lawsuit from the Justice Department, there were plenty of other megadeals in media, tech and entertainment that kept investment bankers busy in 2017.

Here are some of the biggest deals of the year:

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9 Biggest Billion-Dollar Entertainment and Media Deals in 2017 (Photos)

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