- A day after their sector-shaking $52.4B deal over assets, Walt Disney (NYSE:DIS) is up another 0.5%, while Twenty-First Century Fox is significantly higher as well (FOX +2.2%, FOXA +1.9%).
- While the deal looks positive for both sides, it comes with high antitrust risk, says KeyBanc analyst Andy Hargreaves in a note downgraded Fox to Sector Weight.
- The antitrust environment (which also features government opposition of the $85B AT&T/Time Warner deal) is "highly uncertain," Hargreaves says, and that means a discount is warranted.
- Opposition to the Fox/Disney deal may not just come from competitors but also from sports leagues, facing the combination of ESPN with Fox's 22 regional sports networks.
- Meanwhile, he says the news leaves Viacom (VIA +1%, VIAB +0.8%) and Lions Gate (LGF.A +1%, LGF.B +0.8%) as the most attractive candidates for acquisition among traditional media. (h/t Bloomberg)
- Now read: Disney: Investors Should Expect More Of The Same (This Is Not A Bad Thing)
Original article