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Disney CEO confident about offering for Fox assets



Walt Disney Co. Chief Executive Officer Robert Iger expressed his confidence that his company would succeed in bidding for 21st Century Fox's most important assets, despite Comcast Corp. On Monday, as the cable giant was preparing for a possible bid to outdo Disney for Fox, Mr. Iger said in a teleconference over his company's financial results with Wall Street analysts Tuesday that he "had made a competing bid." Confident is what assets we are currently processing The acquisition of "will easily fit into Disney once the deal is approved."

Anyone who lands the Fox assets wins in a media landscape characterized by changing consumer habits and the need to counter defenses Direct Competitors Seize Significant Advantage Like Netflix Inc., Disney hopes to acquire Fox's film and television studio, cable networks and international real estate.

Disney's $ 52.4 billion, all-stock deal, was in the December announced as a chance for the world's largest entertainment company to become even more dominant. "Disney-M Anagers have announced that the deal should be completed next year. (21

st Century Fox and Wall Street Journal publisher News Corp share common ownership.)

Comcast can turn these plans upside down. The cable company is preparing for a possible hostile bid for the Fox assets and has started financing that would enable a cashless bid, people say, close to the situation. Before agreeing to the Disney deal, Fox turned down an offer from Comcast that was 16% higher, citing regulatory hurdles.

Comcast would be more motivated to pursue an enemy bid for the Fox assets if AT & T Inc. proposed the takeover of Time Warner Inc. survived a government antitrust lawsuit, people close to the situation say. That's because both deals are "vertical" transactions that combine content and distribution.

However, there is no guarantee that a favorable outcome for AT & T-Time Warner would cause antitrust enforcers to bless a Comcast-Fox binding are some important differences between the deals. Comcast already owns a larger group of media networks through its NBCUniversal Unit, unlike AT & T. And Comcast and Fox are both major owners of regional sports networks, so the cable company may have to part with some of these assets to make a deal.

If a bidding war should begin, Disney may have to offer its raise or present a mix of cash and stock. The company should have no problem solving the debts that are needed in such a scenario, said Robin Diedrich, an analyst with Edward Jones.

Although both companies have strong credit ratings, Disney's record is "in a better position," Comcast's, she said.

Second quarter revenue from Disney clearly exceeded Wall Street expectations, showing strong growth in the film studio and parks business. Net income increased 23% to $ 2.94 billion. The track record of "Black Panther" and a rebound in the Disney Parks and Resorts businesses increased total revenue by 9% to $ 14.5 billion.

Disney's results were released after market close. The stock fell slightly to $ 101.19 after-hours.

The profits came about a month after the launch of ESPN Plus, a direct-to-consumer sports program from which the company hopes to prevent a further decline in the traditional ESPN subscriber base. A second streaming service focused on Disney entertainment brands such as Marvel Studios will premiere in late 2019.

After Mr. Iger confirmed ESPN subscriber losses on a profit distribution in August 2015, Wall Street considered the decline as an existential debt the company's most valuable business. Mr Iger said that the answer to ESPN Plus was "enthusiastic" and that his free-test conversion rates had been "good" so far, but he had not offered any further details beyond that.

reach younger male viewers, Disney UFC has struggled to be a cornerstone of ESPN Plus. The deal, announced Tuesday, is for exclusive rights to stream 15 live UFC events. The five-year pact is estimated at $ 750 million over the contract, according to a person familiar with the matter.

In the second quarter, the company's cable television network, which includes ESPN, reported a% decline in operating income, partly due to costs associated with ESPN Plus.

Real estate acquired through a possible Fox deal, such as regional sports networks and National Geographic, could be added to Disney's streaming services, said Iger. [19659002] Marvel Studios, along with other Disney Entertainment studio divisions, Pixar Animation Studios and Lucasfilm, will play a pivotal role in luring customers to a second Disney streaming service, which launches next year. Mr. Iger said the family entertainment service will offer a "rich mix of beloved classics, new releases and new content."

If the Fox deal came through, Disney would become the majority owner of the Hulu streaming service and

Disney's strong quarter was driven primarily by two divisions: studios and parks and resorts.

Studio entertainment revenue increased 21% to $ 2.5 billion, reflecting the company's unprecedented record-breaking role at the box office. The company has nine of the ten largest national box offices of all time – all of which have been published in the last six years.

The February "Black Panther" has grossed more than $ 1.3 billion worldwide and is currently the third highest grossing film in the US and Canada with $ 693 million. The studio's latest release, Avengers: Infinity War, has grossed $ 1.2 billion worldwide in about two weeks.

The other major artist, the Disney Parks and Resorts, saw a 13 percent increase in Walt Disney World Resort's increased spending and attendance and higher average ticket prices in its US parks, among other factors. Overseas locations in Paris and Hong Kong increased, while Shanghai Disney Resort saw fewer visitors.

– Maria Armental and Joe Flint contributed to this article.

Write to Erich Schwartzel at erich.schwartzel@wsj.com [19659025]
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