November 17, 2017 / 1:32 PM / 24 days ago

Fox shares rise on signs of more takeover interest

(Reuters) - Twenty-First Century Fox Inc (FOXA.O) shares were up 3 percent in trading on Friday after sources said both Comcast Corp (CMCSA.O) and Verizon Communications Inc (VZ.N) were interested in buying parts of its studio and TV operations.

A week after reports of interest from Walt Disney Co (DIS.N) in buying out much of Rupert Murdoch’s U.S. film and television empire, the sources hinted at the prospect of a battle between other media suitors for the assets.

Buyers have expressed interest in Fox’s production studios, cable networks FX and National Geographic, and international assets such as the Star network in India and Sky Plc (SKYB.L), sources told Reuters on Thursday.

“Either Disney or Comcast would be a good fit, but its always about price and neither has to be a strategic buyer, only opportunistic,” said JBL Advisors analyst Jeffrey Logsdon.

Shares of other media companies which could be dragged into a round of consolidation of U.S. film and TV production and distribution were largely unchanged.

Comcast, the largest cable provider in the United States, has steadily boosted its content ownership over the years and buying Fox’s assets would give it an international distribution footprint and strengthen its position against Disney.

Traditional media companies have been struggling with subscriber declines as streaming service Netflix (NFLX.O) has gained traction with younger audiences that shun traditional cable and satellite offerings.

Pivotal Research analyst Brian Wieser remains uncertain as to whether the Murdoch family is seriously entertaining offers.

FILE PHOTO: The Twenty-First Century Fox Studios flag flies over the company building in Los Angeles, California U.S. on November 6, 2017. REUTERS/Lucy Nicholson /File Photo

Wieser surmised that all the interest in Fox by other companies probably came after they heard something regarding Disney’s potential interest that was at least enough to take a meeting.

“Previously, no-one would have guessed that such a meeting would have ever occurred. That’s enough for other companies to get their bankers working on something to attempt to get a meeting of their own,” he said.

Verizon shares were up 1.4 percent, while Comcast and Netflix shares were down about 1 percent.

Fox and Disney are partial co-owners of Hulu, a streaming service that offers on-demand and live TV packages. Hulu is also partially owned by Comcast and Time Warner Inc (TWX.N).

“I think if Time Warner doesn’t end up being bought by AT&T - it looks like that’s going to get blocked - that would be an interesting combination... Time Warner-Fox or Disney-Fox,” Needham & Co analyst Laura Martin told Reuters.

Although acquisition of a movie studio and cable channels would be a departure for wireless carrier Verizon, its interest in Fox assets was likely piqued by rival AT&T’s (T.N) bid for HBO and CNN owner Time Warner, which is awaiting regulatory approval.

“(I am) sceptical of a Verizon deal, creative businesses are very tough to manage for an outsider,” Logsdon said.

Fox’s other assets include Fox television network, Fox News Channel and Fox Entertainment Group, which owns the popular movies studio 20th Century Fox.

Fox shares have gained about 9 percent in value in the last six months.

Reporting by Supantha Mukherjee and Arjun Panchadar in Bengaluru; Editing by Patrick Graham, Bernard Orr

Our Standards:The Thomson Reuters Trust Principles.
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