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 The Murdoch family, which controls Fox, prefers a deal with
Disney because it would rather be paid in Disney than Comcast
stock, and expects a potential deal with Disney to be cleared by
U.S. antitrust regulators more easily, one of the sources said.
However, no deal between Disney and Fox is imminent and several
issues have yet to be fully negotiated, the sources said.
The Reuters sources asked not to be identified because the
negotiations are confidential. Fox and Comcast declined to
comment, while Disney did not immediately respond to requests
for comment.
Fox is exploring a potential sale as it is has been considered
undervalued relative to its peers, said Brian Wieser, an analyst
at Pivotal Research.
“At the beginning of this year, Fox was the only buy-rated stock
I had because it was so depressed relative to everything else in
the sector,” Wieser said.
Fox Chief Executive James Murdoch, speaking at the UBS Global
Media and Communications Conference in New York on Tuesday,
declined to comment on reports about a potential sale.
"It’s always good to look at what’s going to create the most
value for our shareholders,” he told attendees.
CNBC had reported earlier on Tuesday that a deal for Disney to
buy Fox's movie studio and television production assets for more
than $60 billion could come as early as next week.
Fox shares were up 0.57 percent in late afternoon trading, while
Disney was down 2.45 percent. Comcast shares were down 1.56
percent.
Disney, which has a market value of around $166 billion, would
acquire Fox's FX and National Geographic cable channels, its
movie studio, the Star network in India and stake in European
pay-TV provider Sky PLC.
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Fox anticipates that its deal to buy the remaining 61 percent stake
of Sky, which has been held up by regulators, will be approved in
the first half of 2018. Any deal for Fox would include the remaining
stake of Sky, sources have told Reuters.
Fox would keep its news and business news divisions, its broadcast
stations and Fox Sports, the sources said.
Reuters reported in November that Comcast, which is the largest U.S.
cable provider and has a market value of around $188 billion, had
expressed interest in Fox assets.
Those assets would offer the opportunity for both Comcast and Disney
to broaden their international distribution footprint.
They would also be a source of new content at a time when companies
like Amazon.com Inc <AMZN.O> and Netflix Inc <NFLX.O> are spending
billions to bulk up on programming. Comcast has steadily boosted its
ownership of content over the years.
Any potential deal would follow the U.S. Department of Justice's
decision to sue to block AT&T Inc's $85.4 billion deal to buy Time
Warner Inc.
(Reporting by Greg Roumeliotis and Jessica Toonkel in New York;
Additional reporting by Laharee Chatterjee and Munsif Vengattil in
Bengaluru and Anjali Athavaley in New York; Kate Holton in London,
Lisa Richwine in Los Angeles; Editing by Saumyadeb Chakrabarty and
Meredith Mazzilli)
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