The Justice Department drove a stake through the heart of Comcast’s bid for Fox

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Justice Department appeals approval of AT&T-Time Warner deal

It could be time for Comcast to throw within the towel.

By interesting the AT&T-Time Warner resolution, the Justice Division sophisticated the corporate’s probability to purchase most of 21st Century Fox (FOXA).

Comcast (CMCSA) has been in a bidding struggle with Disney (DIS) over Fox, which is promoting its film studio, worldwide property and cable channels like FX and Nationwide Geographic. Disney regained the higher hand when it elevated its provide just a few weeks in the past to $71.three billion, and analysts have been speculating about whether or not Comcast would attempt to prime that bid.

But it surely’s getting more durable for that to occur. Comcast’s prospects had been already known as into query when US antitrust authorities authorized Disney’s bid for Fox final month, since Comcast hasn’t but acquired the identical blessing. And the federal government’s enchantment within the AT&T-Time Warner case might deal a dying blow to Comcast’s Fox bid as a result of that merger would in some ways look just like AT&T’s buy of Time Warner.

Associated: Disney wins antitrust approval to buy most of Fox

Like AT&T (T), Comcast is a content material distributor attempting to purchase a content material creator, and it has related dimension and talent to wield important energy in negotiations with different pay-TV operators. One concern within the AT&T case was whether or not the telecom firm might drive up prices for rivals who need to broadcast channels like CNN, TNT and TBS, which had been all Time Warner properties.

Disney, a content material creator, does not personal any pipes.

In an interview with CNBC on Friday, AT&T CEO Randall Stephenson agreed that Comcast was in a tricky spot.

“It most likely can not help it,” he stated of Comcast’s potential to make one other run at Fox. “You are in a state of affairs the place two entities are bidding for an asset, and this sort of motion can clearly affect the end result of these actions.”

The concern of a regulatory problem is a part of what made main Fox buyers nervous when the corporate was in talks with Comcast a few takeover late final yr.

“This can be a clear present to Disney,” analysts on the MoffettNathanson analysis agency wrote in a weblog put up Thursday. “We have argued all alongside that Fox’s board has been searching for a justifiable purpose to decide on Disney over Comcast.”

The analysts stated the AT&T enchantment appears to be the “closing nail within the coffin for Comcast’s Fox chase.”

Comcast didn’t instantly reply to a request for remark. When CNNMoney asked Disney CEO Bob Iger on Thursday about what the ruling may imply, he stated he did not but have an opinion.

Associated: Comcast will increase its provide for Sky

Comcast’s hopes for enlargement have not been fully dashed. The corporate continues to be attempting to achieve management of the European broadcaster Sky, which is a frontrunner in pay TV in the UK and different markets together with Germany and Italy.

Comcast is preventing over that firm with Fox, which already owns 39% of Sky and has agreed to promote its stake to a 3rd social gathering similar to Disney. When Comcast raised its bid to £26 billion this week (about $34 billion), Sky’s unbiased board committee beneficial that shareholders settle for that provide.

There’s no less than one clear winner in the entire drama: Fox Chairman Rupert Murdoch. President Donald Trump’s confidant advantages from the bidding struggle, which has pushed up the worth of his firm’s sale by greater than $15 billion.

–CNNMoney’s Dylan Byers, Hadas Gold and Brian Stelter contributed to this report.

CNNMoney (New York) First revealed July 13, 2018: 1:22 PM ET



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