Rosenblatt: Comcast Challenge For Fox Assets Could Reduce Arbitrage Discount


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By some accounts, Twenty-First Century Fox Inc (NASDAQ:FOXA) is, well, foxy. The company could still be the apple of more than one acquirer’s eye, according to Rosenblatt Securities.

The Rating

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Rosenblatt Securities analyst Alan Gould reiterated a Buy rating on Fox with a $43 price target.

The Thesis

Walt Disney Co (NYSE:DIS) offered Fox $40 per share for a strong portion of the company’s media assets, and while talk of a Comcast Corporation (NASDAQ:CMCSA) challenge has simmered, Rosenblatt thinks it’s still a possibility.

The Wall Street Journal reported that Comcast is considering renewing its bid depending on the timeline of the merger proxy filing and the outcome of the Justice Department’s AT&T Inc. (NYSE:T)-Time Warner Inc (NYSE:TWX) case. Like Disney, Comcast is seen to value Fox’s international platforms and Hulu.


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“We don’t know if Comcast will indeed bid, but at a minimum, we would think the prospects of a competitive bid should reduce the arbitrage discount investors are putting on Fox,” Gould said in a Monday note. 

A $46-per-share bid from Comcast, he said, would lend upside to the current trading value of $36 and prompt a counter-bid from Disney. Should Fox opt for the alternate buyer, it would be required to pay Disney a $1.5-billion break-up fee.

Price Action

At the time of publication, Fox was trading up 1.9 percent around $36.41. 

Related Links:

Could Disney Hold Up The AT&T-Time Warner Deal?

Analyst: Astute Investors Will Take Profits In 21st Century Fox Now

Wall Street Reacts To Disney's Purchase Of Fox's Entertainment Assets


27% profit every 20 days?

This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.


Posted In: Analyst ColorNewsPrice TargetReiterationM&ATop StoriesAnalyst RatingsAlan GouldRosenblatt