Fox Is Said to Lean Toward Starting Negotiations on Comcast Bid

(Bloomberg) -- Rupert Murdoch’s 21st Century Fox Inc. is leaning toward starting negotiations with Comcast Corp., paving the way for a bidding war over its entertainment assets, people with knowledge of the matter said.

Fox’s board, which agreed six months ago to sell the assets to Walt Disney Co. in an all-stock deal, is convening Wednesday to consider Comcast’s $65 billion all-cash proposal, Bloomberg News reported earlier. The meeting is likely to result in Fox kicking off a process to formally evaluate Comcast’s bid, the people said, asking not to be identified as the matter is private.

Directors can either begin that process by declaring on Wednesday that Comcast’s proposal has a reasonable chance of becoming a superior offer, or they can simply ask Disney for a waiver to begin conversations with Comcast. The situation is fluid, and the Fox board’s thinking could change, the people said. Fox’s formal evaluation of the bid could last months rather than weeks, as the board would seek counsel from financial advisers, one of the people said.

In a statement last week, Fox said that it would “carefully review” Comcast’s unsolicited proposal. A representative for Fox didn’t immediately respond to a request for comment outside regular business hours.

Disney and Comcast are fighting over the assets as they scramble to build scale to compete with fast-growing digital giants like Netflix Inc. and Amazon Inc. that are reshaping the media landscape. Comcast lost out to Disney in December because of concerns it would face greater regulatory hurdles.

Comcast bid $35 per share for Fox’s entertainment assets, while Disney’s agreed offer is valued at about $29.12 a share based on its Tuesday closing price. Under the terms of its merger agreement with Fox, Disney has the right of refusal on any counteroffer. If the Fox board deems Comcast’s offer to be better, Disney will have five days to make a fresh bid.

If Fox were to start negotiations with Comcast, that could impact plans for shareholders to vote on the Disney deal next month. The investor vote is currently scheduled for July 10.

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