Comcast today said it is preparing an offer to buy major shares of 21st Century Fox, which would give it majority control of Hulu and other media properties.
The Walt Disney Company already has a $52.4 billion all-stock deal to buy 21st Century Fox assets. But Comcast is rumored to be lining up $60 billion in funding in order to bid for the Fox assets, and Comcast’s announcement today confirms it.
Comcast “is considering, and is in the advanced stages of preparing, an offer for the businesses that Fox has agreed to sell to Disney,” Comcast’s show tell. Comcast is working on the offer in preparation for shareholder meetings in which the Disney/Fox deal will be considered.
The Fox assets for sale do not include properties such as Fox News Channel, Fox Business Network, and Fox Broadcasting Company. Those assets will be spun off into a company referred to as “New Fox,” and Comcast will acquire 21st Century Fox after the spinoff.
A sale of Fox to either Disney or Comcast would include 21st Century Fox’s movie and television studios; cable entertainment network; the Fox Sports Regional Networks; and international properties including Star in India and Fox’s 39-percent ownership of Sky across Europe.
Comcast is seeking control of Hulu
The sale will also include Fox’s 30-percent stake in Hulu, the popular online video streaming service. Comcast already owns 30 percent of Hulu, so the deal with Fox would give the nation’s largest cable company control over the online video provider.
Comcast said its offer for Fox “would be at least as favorable to Fox shareholders as Disney’s offer.”
“While no final decision has been made, at this point the work to fund the general fund offering and make key regulatory filings is well underway,” Comcast also said.
In the US, a Comcast/Fox deal will face scrutiny from the Justice Department, which is trying to stop AT&T from buying Time Warner Inc. A judge is expected to rule on the AT&T/Time Warner merger by May 12, and Comcast is reported is awaiting the outcome of that test before proceeding with a bid for the Fox assets.
“Comcast made an announcement Wednesday about its preparations because its executives are worried that Fox and Disney could quickly vote for shareholders before a decision on the AT&T/Time Warner deal comes down, according to people close to Comcast,” Wall Street Journal reported today.
Comcast already owns NBCUniversal thanks to a 2011 acquisition; it was NBC’s purchase that gave Comcast its minority stake in Hulu. US regulators have imposed merger conditions that prevent Comcast from exercising operational control over Hulu, but those conditions will expire on September 1 of this year.