Comcast Gives Up Battle For 21st Century Fox Assets

Cable company will focus on pursuit of Sky
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Comcast Corp. on Thursday said it's folding its hand giving up its pursuit of assets of 21st Century Fox that Fox has agreed to sell to the Walt Disney Co.

“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.”

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Fox is trying to buy Sky and Sky would become part of Fox unless Comcast successfully out bids Fox for the European satellite broadcaster.

Disney is now poised to acquire Fox’s entertainment cable networks in the U.S. and its TV and movie studios.

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Comcast has made several passes at the Fox assets, beginning last year but Fox head Rupert Murdoch and his family preferred to own Disney stock rather than Comcast’s. In the last week, Disney was able to get its bid for Fox’s assets approved by U.S. regulators while the Justice Department’s decision to appeal the decision letting AT&T acquire Time Warner cast a shadow on Comcast’s ability to gain approval.

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In Thursday’s statement, Comcast’s chairman and CEO said “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."

After Comcast's announcement, Iger, Disney's CEO, released a statement.  

“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," Iger said in the 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.”

Analysts had been concerned that the bidding war would hurt Disney and even more so Comcast if they overpaid for the assets they were pursuing.

"From the very outset, Comcast has looked to be wrong-footed in its quixotic pursuit of Fox. For that very reason, today’s announcement that Comcast is dropping out of the race is, while certainly welcome, something close to old news. Most observers had already figured out that this was the only feasible outcome, said Craig Moffett, analyst at MoffettNathanson Reserach.

"What’s left, of course, is Comcast’s ongoing pursuit of Sky. Investors will naturally hope that Comcast loses that one as well. But, as Comcast has made clear, that’s the asset they’ve really wanted all along, so it seems much less likely that Comcast will withdraw without at least a few more rounds of bidding," Moffett said.

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