Friday 16 November 2018

Twenty-First Century Fox deal to unleash M&A wave

Photo: AP
Photo: AP

Lynn Adler

Media company Comcast Corp's record US$65bn (€56bn) bid to buy Twenty-First Century Fox's media assets, one day after AT&T's long-sought acquisition of Time Warner received a green light, signals an oncoming wave of M&A that banks will aggressively compete to finance.

The US federal judge's ruling in favour of the US$85bn AT&T/Time Warner tie-up, first announced in October 2016, without any conditions, removed an obstacle for debt markets after several huge, high-profile technology and healthcare deals were scuttled by antitrust or national security concerns.

"After the AT&T news, people have a much more optimistic view on the regulatory front, and I think that will push bankers to pitch more on M&A," said one senior banker. "There's more of a willingness to look at vertical integrations," in which a company buys a supplier.

Comcast, in announcing its Walt Disney Co-topping bid, said it had "highly confident" letters from Bank of America Merrill Lynch and Wells Fargo that the banks can secure the needed financing for the proposed acquisition.

A considerable amount of the needed financing was already put in place before this newly-raised bid. In April, the company said it lined up £23bn (€27.6bn) of loans led by BAML and Wells Fargo.

The existing credit comprises up to €18bn of 364-day bridge loans and up to €8bn of term loans, with the bridge expected to be replaced in part or in full by senior unsecured bonds, it was previously reported.

AT&T's victory "does make people feel a bit more of a risk appetite for complex transactions on the regulatory front," said another banker. (Reuters)

Irish Independent

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