DVDizzy Forum

Cable provider and NBCUniversal owner Comcast is making a bid for the entertainment company 21st Century Fox.

It has reportedly rounded up $60 billion in cash from various investment banks in order to make the deal happen.

But wait a minute, didn’t Fox agree to merge with entertainment company Disney?

So why is Comcast making an end run around Disney to try to capture Fox?

It’s what’s known in the investing world as a hostile bid, or hostile takeover. That’s when one company attempts to buy a company, against the wishes of the executives and board managing that company.

In the 1980s, it became popular for certain investors or companies to buy up as many shares of the company it wished to acquire, until it had a majority ownership of the target company.

This tactic is also known as corporate raiding.

The film Wall Street, which features Michael Douglas as the fictional corporate raider Gordon Gekko, who famously said, “greed is good,” put its cultural stamp on the era.

Comcast’s strategy is to offer the Fox’s shareholders a deal that’s more lucrative than the one that was initially proposed. In this case, Comcast is offering an additional $8 billion, which is known as a premium over the original purchase price.

A premium is like a bonus, it’s an amount that’s more than the original price, and it acts as a sweetener for the deal, providing shareholders with more money once the deal goes through.

The Comcast bid isn’t a done deal yet. In fact, Comcast had tried unsuccessfully to purchase Fox assets in November, according to reports. Shareholders must ultimately agree to the new offer.

Regulators examining the proposed Disney and Fox merger for monopoly implications may also rule against the deal, which would similarly make the Comcast takeover unlikely, on the same grounds.

For Comcast CEO Brian Roberts, whatever happens is viewed as a victory, as he could acquire Sky, most of Fox or all of the above. If he doesn’t, he will have succeeded in driving up the price Disney must pay for any or all of those assets.

Sotiris wrote:Rupert Murdoch May Be Willing to Go With Comcast Bid for Fox Assets (Report)
https://www.hollywoodreporter.com/news/ ... rt-1118064

Sotiris wrote:Is Fox even worth this much?