AT&T wins court approval to buy Time Warner for $85 billion

AT&T wins court approval to buy Time Warner for $85 billion

AT&T wins court approval to buy Time Warner for $85 billion

Yesterday, CEO Brian Roberts told investors that Comcast is in the "advanced stages" of preparing a bid for 21st Century Fox - an offer dependent on the ruling in the AT&T-Time Warner anti-trust case.

However, part of the appeal of the Disney deal to the Murdoch family was its ability to make them influential Disney shareholders, with 21st Century Fox Chief Executive James Murdoch (son of Executive Chairman Rupert Murdoch) potentially inheriting a high position at Disney if the deal is completed.

It said it remains subject to the terms of its deal with Disney, a stock transaction valued at $52.4bn, or more than $66bn including debt, when it was announced in December. Considering that Disney has already bid for the same assets, a bidding war is is at hand. The new $65 billion offer from Comcast also includes a $2.5 billion reverse breakup fee if the deal is struck down by the government.

Still, the AT&T court fight gave Comcast valuable information about how to structure a Fox deal, said David Scharf, a litigation expert with Morrison Cohen. This new offer puts that situation in flux and promises to put Comcast and Disney at odds as they try and maneuver against each other for Fox's assets.

For example, when Comcast acquired NBCUniversal in 2011, the DoJ mandated that Comcast would have to submit to third-party arbitrators over any pricing disputes with other channels, and said that Comcast couldn't have any control over streaming service Hulu (which Comcast owns a stake in).

Comcast was in talks to buy Fox late past year.

Earlier this week, sources claimed that Comcast was keenly watching the AT&T legal battle with the Justice Department to see whether it would be able to acquire Time Warner.

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Shares of Fox rose more than 7%, while Comcast sank about 3%. But if Disney gets Fox, the combined movie studios would account for 45 percent of worldwide box office revenue, according to BTIG analyst Richard Greenfield. To survive the great unbundling, AT&T needs a content package strong enough to gain it a share of the "over-the-top" media market.

Disney and Comcast could even end up splitting ownership.

Update: Fox sent out a statement confirming that it has received the bid.

Fox, which is led by Rupert Murdoch and his sons, rejected an offer from Comcast previous year, citing concerns that antitrust officials would oppose a deal.

Just because Comcast has made a higher offer doesn't mean that Fox will take it.

Comcast if successful would be able to expand beyond United States borders to new markets in Europe and India.

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