US cable giant Comcast is reportedly seeking a loan of up to $60 billion to support a cash bid for media properties that 21st Century Fox has already said it will sell to Walt Disney Co for a fee of $52 billion. (See Disney Buys Fox for $52.4B.)
The cable operator has asked investment banks to increase its financing facilities, according to a report from Reuters that cites sources close to the matter, but will only go ahead with its bid if authorities allow AT&T Inc. (NYSE: T) to acquire Time Warner Inc. (NYSE: TWX) in an $85 billion deal. (See DOJ Makes Last Stand Against AT&T.)
Any Comcast Corp. (Nasdaq: CMCSA, CMCSK) takeover would obviously sink the deal between 21st Century Fox and Walt Disney Co. (NYSE: DIS), which in December said it would take control of Fox's film, TV and international businesses in an all-stock transaction.
Further complicating the picture is a £22 billion bid that Comcast has made to acquire a 61% stake in UK pay-TV company Sky . The other 39% of Sky is owned by Fox, which is keen to take control of the entire business. (See Why Sky's the Limit for Comcast and Comcast Bids $31B to Steal Sky From Fox, Disney.)
Comcast was reported to have made a $64 billion offer for Fox assets last November, but Fox accepted the lower bid from Disney, arguing in filings that regulation would be a potential barrier to any deal with Comcast.
As Reuters reports, the value of the latest Comcast bid for assets owned by Fox is unclear, but the $60 billion financing facility would give it ammunition to outbid Disney.
The latest move shows how AT&T's controversial bid for Time Warner, which owns media properties including Warner Bros and HBO, has rattled telecom and media competitors such as Comcast, which are worried AT&T would become a dominant market force if allowed to acquire Time Warner.
— Iain Morris, International Editor, Light Reading