The Comcast-Fox-Disney Poker Game Gets Even More Interesting
If you’ve been following the bidding war between Comcast and Disney to acquire the entertainment division of 21st Century Fox, you know Disney is currently the lead contender to win the prized assets. Meanwhile across the pond, Fox is in the late stages of its own acquisition of controlling interest in European TV giant Sky Networks. The two deals have been running on separate paths until Comcast made a brilliant counterpunch this week by submitting its own bid for Sky.
Here’s why this move is so savvy. If Comcast loses the battle for Fox they’ll have plenty of capital for other M&As, and Sky would fit nicely into their portfolio as a European equivalent of its NBCUniversal asset. However, if Fox raises its offer to buy Sky as a way to fend off Comcast, it will put more debt onto the parent 21st Century Fox’s balance sheet, making Fox less attractive for Disney to buy. So in a way Comcast can exact some measure of revenge on Disney even if it doesn’t win either Fox or Sky. Pretty clever, right?
Of course the real winners in this flanking maneuver are the current Sky shareholders, because their market valuation keeps going up as two media giants wrestle for total domination of the universe.