Market Overview

Jefferies: The Fate Of Fox Depends On The AT&T-Time Warner Merger Trial

Share:
Jefferies: The Fate Of Fox Depends On The AT&T-Time Warner Merger Trial

Comcast Corporation (NASDAQ: CMCSA) is reportedly preparing an all-cash bid for Twenty-First Century Fox Inc Class A (NASDAQ: FOXA)’s entertainment assets, forcing Fox to choose between two powerful distributors.

Whether it wants Walt Disney Co (NYSE: DIS) or Comcast remains irrelevant until the AT&T Inc. (NYSE: T)-Time Warner Inc (NYSE: TWX) ruling is issued, according to Jefferies.

The Rating

Analyst Scott Goldman maintained a Buy on Comcast with a $50 price target.

The Thesis

By Jefferies assessment, Fox’s fate depends on a favorable ruling for the AT&T-Time Warner deal, which similarly involves a hegemonic content distributor and prolific content creator. (See Goldman's track record here.)

The Street expects a judgment by June, which gives Fox’s bidders more time to adjust their proposals.

“It is reasonable to expect Disney to counter any potential offer while also changing the composition of its current all-stock offer,” Goldman said in a note. “In our view, Comcast and Disney are likely to view this as the last remaining transformational deal in media.”

Disney originally agreed to buy Fox for $52 billion with Comcast seeking Sky for $30 billion. By Jefferies' estimates, Comcast’s proposed all-cash, $60-billion purchase of Fox is seen to boost Comcast’s pro forma leverage to about 4.5 times.

“The acquisitions of both FOX and Sky for nearly $100 billion in all-cash would dramatically change the company's leverage profile,” the analyst said. 

Price Action

Comcast was set to open down 1.5 percent at $31.89 at the time of publication Tuesday. 

Related Links:

Rosenblatt: Comcast Challenge For Fox Assets Could Reduce Arbitrage Discount

Everything We Know About Disney's Bid For 21st Century Fox Assets

Latest Ratings for CMCSA

DateFirmActionFromTo
Oct 2019Initiates Coverage OnMarket Perform
Oct 2019MaintainsBuy
Sep 2019Initiates Coverage OnBuy

View More Analyst Ratings for CMCSA
View the Latest Analyst Ratings

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

 

Related Articles (CMCSA + DIS)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
PTONBank of AmericaInitiates Coverage On29.0
ITRICanaccord GenuityMaintains87.0
GWPHNeedhamInitiates Coverage On200.0
BABairdDowngrades
LUVStifelDowngrades60.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
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.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

Argentina ETF Decked By Interest Rate Spike

The Market In 5 Minutes: Schneiderman Resigns, Piwowar To Step Down, Spending Cuts And More