UPDATED: Comcast’s announcement of a $65 billion bid for 21st Century Fox entertainment assets — 19% higher than Disney’s prior offer — stirred up the companies’ stocks anew in after-hours trading Wednesday before they settled down.
Initially, Fox shares rose as much as 1.6% after the market closed, after already closing up 7.7% in regular trading Wednesday as investors anticipated a Comcast-Disney bidding war. Comcast stock dropped as much as 1.6% immediately after the announcement was released just after 4 p.m. ET, and Disney was down as much as 0.4%.
By 4:45 p.m. ET, Comcast was flat in after-hours trading, 21st Century Fox shares were up 0.2% and Disney had nosed up 0.08%. An hour later, as of 5:45 p.m. ET — after 21CF confirmed receipt of the offer and said it was evaluating the bid — Comcast was up 0.6%, Fox was roughly flat (down 0.05%) and Disney was down 0.3%.
The Comcast all-cash bid for 20th Century Fox and other Fox businesses wasn’t a surprise: Comcast last month announced it was ready to outbid Disney’s stock deal with a “superior offer.” It’s the first big M&A domino to fall after a judge’s ruling Tuesday allowed AT&T’s takeover of Time Warner to proceed without any conditions attached.
Other media stocks were largely unaffected by the news of Comcast’s fully expected Fox bid.
Time Warner, which closed up 1.8% to $97.95 per share Wednesday, was up 0.1% in the after-hours session. CBS, Viacom and Lionsgate were flat; at the close of regular trading, CBS was up 3.6% and Lionsgate was up 3% while Viacom dropped 0.5%. Discovery’s stock was up 1.7% in the after-hours session (after closing up 1.6% for the day) and AMC Networks climbed 0.13% (after a 3% gain during regular trading).
Comcast is proposing to acquire the same pieces of 21CF that Disney had negotiated a deal for: 20th Century Fox, the FX cable network, 22 regional sports networks, Fox’s 30% stake in Hulu, and a stake in U.K. satellite broadcaster Sky. Separately, Comcast is also bidding to buy Sky, and the media conglomerate said it intends “to pursue this offer in parallel with our acquisition of 21CF.”
Last fall, Comcast had engaged in extensive negotiations with Fox before Fox’s board accepted the Disney deal.
Under Comcast’s new proposal, 21CF shareholders would receive $35 per share in cash and 100% of the shares of “New Fox,” which would comprise Fox Broadcasting and its TV station group, plus Fox News Channel, Fox Business Network and the Fox Sports group. That offer provides “superior and more certain value as compared to Disney’s all-stock offer,” Comcast CEO Brian Roberts wrote in a letter to Fox’s board.