Fox Says Regulatory Risk Could Delay, Derail Any Comcast Bid
Jun 26, 2018 18:10:25 GMT
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Post by Lord Death Man on Jun 26, 2018 18:10:25 GMT
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Fox Says Regulatory Risk Could Delay, Derail Any Comcast Bid
June 26, 2018, 11:13 AM EDT Updated on June 26, 2018, 12:11 PM EDT
21st Century Fox Inc. determined that a deal with Comcast Corp. has more antitrust risk than its pact with Walt Disney Co., even after the U.S. failed to block a takeover of Time Warner Inc.
Fox’s management and lawyers at Cleary Gottlieb Steen & Hamilton LLP -- while reviewing Disney’s revised offer earlier this month -- concluded that antitrust concerns could scuttle a transaction with Comcast, according to a regulatory filing Monday.
"While a potential Disney transaction was likely to receive required regulatory approvals and ultimately be consummated, a strategic transaction with Comcast continued to carry higher regulatory risk," according to registration statement filed with the U.S. Securities and Exchange Commission. That could lead "to the possibility of significant delay in the receipt of merger consideration as well as the risk of an inability to consummate the transactions."
The Fox board last week agreed an improved, $71.3 billion deal to sell its entertainment assets to Disney, overlooking Comcast for the second time in six months. The details in the filing highlight the steep challenge facing Comcast as it considers a counter-bid for the assets.
Regulatory Factors
Fox’s board considered eight factors on the regulatory front before accepting Disney’s revised offer, according to Monday’s filing.
That included the U.S. Department of Justice’s “apparent sensitivity to the potential anti-competitive effects of vertical integration,” Fox said in the filing.
The Justice Department lost its case to block AT&T Inc.’s purchase of Time Warner due to a lack of evidence, not as a matter of law, Fox said. Other factors it weighed included Comcast’s market share and strength in broadband, its acquisition of NBCUniversal, the prospect that Comcast will gain a controlling position in Hulu and Comcast’s ownership of regional sports networks that compete with Fox’s sports assets.
Comcast also didn’t offer “enhanced protections to address the higher regulatory risk,” according to the filing. While Comcast’s proposals for assuaging regulatory risk were better than it had offered late last year, Fox was still reluctant to move forward, it said.
"A strategic transaction with Comcast would be subject to a greater degree of regulatory uncertainty, including the possibility of an outright prohibition and a higher risk of divestitures and delay to closing," Fox said. “A transaction with Comcast, given its asset mix, raised a significantly more difficult set of regulatory issues than a transaction with Disney.”
Fox Says Regulatory Risk Could Delay, Derail Any Comcast Bid
June 26, 2018, 11:13 AM EDT Updated on June 26, 2018, 12:11 PM EDT
21st Century Fox Inc. determined that a deal with Comcast Corp. has more antitrust risk than its pact with Walt Disney Co., even after the U.S. failed to block a takeover of Time Warner Inc.
Fox’s management and lawyers at Cleary Gottlieb Steen & Hamilton LLP -- while reviewing Disney’s revised offer earlier this month -- concluded that antitrust concerns could scuttle a transaction with Comcast, according to a regulatory filing Monday.
"While a potential Disney transaction was likely to receive required regulatory approvals and ultimately be consummated, a strategic transaction with Comcast continued to carry higher regulatory risk," according to registration statement filed with the U.S. Securities and Exchange Commission. That could lead "to the possibility of significant delay in the receipt of merger consideration as well as the risk of an inability to consummate the transactions."
The Fox board last week agreed an improved, $71.3 billion deal to sell its entertainment assets to Disney, overlooking Comcast for the second time in six months. The details in the filing highlight the steep challenge facing Comcast as it considers a counter-bid for the assets.
Regulatory Factors
Fox’s board considered eight factors on the regulatory front before accepting Disney’s revised offer, according to Monday’s filing.
That included the U.S. Department of Justice’s “apparent sensitivity to the potential anti-competitive effects of vertical integration,” Fox said in the filing.
The Justice Department lost its case to block AT&T Inc.’s purchase of Time Warner due to a lack of evidence, not as a matter of law, Fox said. Other factors it weighed included Comcast’s market share and strength in broadband, its acquisition of NBCUniversal, the prospect that Comcast will gain a controlling position in Hulu and Comcast’s ownership of regional sports networks that compete with Fox’s sports assets.
Comcast also didn’t offer “enhanced protections to address the higher regulatory risk,” according to the filing. While Comcast’s proposals for assuaging regulatory risk were better than it had offered late last year, Fox was still reluctant to move forward, it said.
"A strategic transaction with Comcast would be subject to a greater degree of regulatory uncertainty, including the possibility of an outright prohibition and a higher risk of divestitures and delay to closing," Fox said. “A transaction with Comcast, given its asset mix, raised a significantly more difficult set of regulatory issues than a transaction with Disney.”
