Market Overview

Rosenblatt: Comcast Challenge For Fox Assets Could Reduce Arbitrage Discount

Share:
Rosenblatt: Comcast Challenge For Fox Assets Could Reduce Arbitrage Discount
Related FOXA
Netflix Who? 3 Media Stocks That Look Like They're Back In Favor
9 Streaming Services With The Best Original Content
Sears Files For Bankruptcy (Wall Street Breakfast Podcast) (Seeking Alpha)
Related CMCSA
How Growth And Value ETFs Look After The Debut Of Communication Services
Netflix Who? 3 Media Stocks That Look Like They're Back In Favor
Brunch, Craft Beer & Investing: Embracing Volatility & Managing Risk (Seeking Alpha)

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

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.

“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

Latest Ratings for FOXA

DateFirmActionFromTo
Oct 2018Morgan StanleyReinstatesOverweight
Sep 2018MacquarieMaintainsNeutralNeutral
Aug 2018RBC CapitalDowngradesOutperformSector Perform

View More Analyst Ratings for FOXA
View the Latest Analyst Ratings

Posted-In: Alan GouldAnalyst Color News Price Target Reiteration M&A Top Stories Analyst Ratings Best of Benzinga

 

Related Articles (CMCSA + DIS)

View Comments and Join the Discussion!
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

Teva's 'Achievable' 2018 Outlook, Restructuring Plan Trigger Credit Suisse Upgrade

Benzinga's Top Upgrades, Downgrades For February 12, 2018