Comcast has dropped out of the running for 21st Century Fox assets, clearing the path for The Walt Disney Co. to complete its $71.3 billion purchase of those businesses, but potentially fueling a renewed bidding war for U.K. satellite-TV company Sky.
“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,” it said in a terse statement July 19. For many Comcast investors, the abandonment of the Fox hunt was a welcome relief. Comcast stock rose nearly 3% on July 19 to $34.91. Disney shares were up, too, closing at $112.13 (1.3%) on July 19.
Comcast has a $34 billion offer on the table for Sky, besting a $32.5 billion bid by Fox, which already owns 39% of the satellite company. With Fox’s Sky to become part of Disney after that deal closes — shareholders are set to vote on the deal on July 27 — it is up to Disney to decide whether it wants to engage further.
Disney could shave about $13 billion off its Fox deal by letting the Sky stake go to Comcast. But Sky also has access to 23 million satellite TV customers across Europe, markets that could potentially be huge consumers of Disney streamed content. Disney chairman and CEO Bob Iger has called Sky the “crown jewel” in the Fox package, and his ardor for the satellite company has reportedly increased as the Comcast battle raged on.
BTIG media analyst Rich Greenfield noted to Bloomberg News that one of the chief architects of the Fox transaction, Kevin Mayer, heads a division that will start next year called Direct-to-Consumer and International, where Sky would be a core asset. “It’s hard to believe Disney goes through all of this effort and then just lets Sky go,” Greenfield said.