Chris Hohn’s TCI Fund Management is turning up the heat on Rupert Murdoch.
In a letter to the executive chairman of Twenty-First Century Fox, Hohn urged Murdoch to consider a potential bid from Comcast if it offers a higher price than he agreed to accept from Disney, disputing Murdoch’s notion that a Comcast deal has a higher regulatory risk. London-based TCI, an activist hedge fund firm, said it owns about 137 million shares of the media giant, or 7.4 percent of the shares outstanding.
“We will be strongly motivated by the deal that offers the highest price and we will encourage other shareholders to do the same,” Hohn stated in the two-page letter, which was obtained by Institutional Investor.
The Justice Department earlier this week approved Disney’s offer to acquire a substantial amount of Twenty-First Century Fox’s assets for $38 a share in cash and stock, or $71.3 billion. Including assumed debt, the deal is valued at $85.1 billion. There is substantial speculation that Comcast will weigh in with a higher offer.
In the letter, Hohn disputed assertions made in the June 25 proxy filed jointly by Disney and Twenty-First Century Fox that a potential Comcast bid will “have a higher regulatory risk,” stressing, “We disagree strongly with your arguments.”
He cited, in part, the Justice Department’s recent approval of AT&T’s merger proposal for Time Warner and its approval of the Disney deal. Hohn also asserted that any potential anti-trust problems over horizontal issues — in other words, the concentration of content — “are no greater than for Disney and in most instances are lower.”
He noted, for example, that in the government’s complaint against AT&T, Time Warner’s networks ranked second behind Disney’s.
“Thus, presumably both cable network families have more market power than those of NBCU,” he added, referring to NBC Universal, owned by Comcast.
Hohn also pointed out that it will probably take six to nine months to close a deal between Disney and Twenty-First Century Fox, noting that it will be “constrained by the timetable of international approvals.”
He added that a Comcast deal should not be “on a significantly dissimilar timetable” when it comes to international approvals.
Shares of Twenty-First Century Fox rose a little less than 2 percent on Thursday, to around $49.73.
TCI has held a sizable stake in Fox since the fourth quarter of 2017. It also has held big positions in other media stocks, including Time Warner and Charter Communications.
