Fox rejected Comcast acquisition bid on regulatory concerns DetailsMichelle Clancy | 21 April 2018 Legal documents have shown that 21st Century Fox eschewed a deal with Comcast because of regulatory concerns, before agreeing to sell its TV assets to The Walt Disney Co.According to the S-1 registration statement filed with the US Securities and Exchange Commission this week, two competing suitors emerged for Fox after it began talks with Disney last August. According to reports, they were Verizon Communications and Comcast (referred to as "Party B" in the filing). Verizon's offer was rejected out of hand because it didn't offer a premium; but Comcast's efforts were better received as it offered Fox a whopping $34.41 per share.Ultimately though, Fox settled for $29.54 per share from Disney, largely because Disney has agreed to a $2.5 billion termination fee in the event regulators block the deal; Comcast refused to install such an option. Comcast is still in the deal flow to acquire the Sky pay-TV company in which 21st Century Fox has a 39.1% holding.Fox executives are understandably concerned about gaining regulatory approval for a vertical merger with the cable giant; the Justice Department after all recently scuttled the AT&T-Time Warner mega-merger."A consideration of these factors, discussion with regulatory counsel and an evaluation of the financial impact of [Comcast's] regulatory proposal and possible required divestitures led 21CF [Fox] management to the preliminary conclusion that a strategic transaction with Party B carried a qualitatively higher level of regulatory risk, including the possibility of an outright prohibition, than such a transaction with Disney," Fox said in the filing.Fox and Disney announced their $66 billion deal in December, where the House of Mouse will acquire Fox's film and television studios; most of its regional sports networks in the US; the FX and National Geographic cable channels; subcontinent media company Star India; majority control of the Hulu video streaming service (in which Comcast and Time Warner also have minority stakes); and its 39% stake in satellite broadcaster Sky. Fox meanwhile will keep its local TV affiliates in the US, the nationwide US broadcaster FOX, Fox News Channel, Fox Business Network, Fox Sports, Fox Television Stations Group, and sports cable networks FS1, FS2, Fox Deportes and Big Ten Network. As this suggests, it plans to form a new, news and sports-focused entity with the assets. It also has retained the distribution rights to the first Star Wars film, Episode IV - A New Hope, in perpetuity.Meanwhile, the body governing takeover supervision and regulation in the UK has ruled that Disney may need to make a mandatory offer for pay-TV operator Sky if the deal goes through.Last week, the Panel Executive ruled that The Walt Disney Company will be required to make a mandatory offer for Sky at a fixed price of 10.75 in cash per share within 28 days of completion of Disney's proposed acquisition of 21st Century Fox, unless by then the Rupert Murdoch-own company has achieved his long-standing and cherished ambition of acquiring 100% of the Sky shares, or any third party - in particular and most likely Comcast - has acquired more than 50% of the Sky shares.