The bid battle for 21st Century Fox Inc (NASDAQ:FOX) could kick off in earnest on Wednesday after a key US court ruling approved another mega-takeover.
On Tuesday, a US Federal judge ruled that telecoms giant AT&T Inc. (NYSE:T.) can proceed with its near US$85bn acquisition of Time Warner Inc. (NYSE:TWX), which traders believe will give a greenlight to other big deals.
A battle to ensue?
Fox has agreed a US$52.4bn all-stock deal with Walt Disney Co. (NYSE:DIS) to sell it some of its key TV and movie assets, including its majority holding in UK-based satellite broadcaster Sky PLC (LON:SKY) for which Fox recently got UK approval for a mop-up bid.
However, traders think, cable TV giant Comcast Corp. (NASDAQ:CMCSA) – which has already made a rival bid for Sky - is now likely to formally submit a rival US$60bn all-cash bid for Fox as soon as Wednesday.
The US Justice Department may still object to a Comcast acquisition of Fox assets, but commentators think it would have a much harder time blocking the deal following the AT&T/Time Warner ruling.
If Comcast does formalise its Fox bid, Disney is expected to sweeten its own offer for the TV and movie assets and a battle will ensue.
In pre-market New York trading, Fox shares were 7% higher at US$42.33, while after hours, while Disney shares shed 1.7% to US$102.55, and Comcast shares fell 3.4% to US$31.29.
In London, Sky shares were down 1.1% at 1,342.5p as investors await the next twist in the long-running takeover saga which began back in December 2016.