Comcast is reportedly preparing to formalize its unsolicited bid to purchase the bulk of 21st Century Fox's film and TV assets, a direct clash with rival Disney. The announcement will be expected on Wednesday, assuming U.S. District Court Judge Richard Leon approves the AT&T / Time Warner deal.
Last year, companies across the United States were surprised when the Department of Justice decided to intervene in the AT&T / Time Warner deal. Judge Richard Leon is expected to make a decision on Tuesday; most industry figures believe he'll approve the merger, with reports the government has struggled to demonstrate that it would cause substantial harm. Whatever the outcome, an appeal is certain, but Leon's decision will still be taken as a bellwether for countless other possible mergers and acquisitions. As the New York Times notes, "If the merger is blocked, some executives are likely to slim down their deal aspirations. If the deal ends up going through, expect a cascade of mergers and acquisitions."
According to CNBC, the outcome will have a particularly significant impact on the Disney/ Fox merger. Comcast is preparing an unsolicited cash bid to compete with Disney to purchase the bulk of 21st Century Fox's film and TV assets. CNBC reports that, should Leon judge in favor of the AT&T / Time Warner merger, Comcast will formally announce their bid for Fox. They'll take it as a potential green-light for their own proposed merger.
CNBC reports that Comcast will hold off for 24 hours, though, choosing to formalize their bid on Wednesday. There are two advantages to this approach. Firstly, holding off would allow Comcast time to assess any of the restrictions Leon imposes upon the AT&T / Time Warner merger. Should the restrictions prove onerous, we'd expect Comcast to carefully review their bid and look for potential implications. Secondly, in a smart move, waiting 24 hours would also increase the pressure on Disney. The House of Mouse's rival bid is all-shares. In the event Disney's share price takes a knock from this news, they may be forced to raise their outstanding $52 billion offer.
The AT&T / Time Warner judgment will have a massive impact on every industry. In this case, though, it may be crucial in redefining the shape of Hollywood itself. Whatever happens, Fox is getting out of the movie and network TV business; it's just a matter of which rival manages to acquire its assets. Shareholders are due to vote on July 10, and could potentially force Fox to consider Comcast's unsolicited bid.
The last year has been a tense one for cinema fans, especially lovers of Marvel superhero movies; should Fox choose to go with Disney, and assuming regulatory approval, the X-Men and Fantastic Four franchises will finally return to the MCU. But that's only the tip of the cinematic iceberg, with other prizes including the Avatar franchise, a massive archive for digital streaming services, and a significant global distribution network.