Fox, other media companies rise after AT&T-Time Warner approval

(Reuters) – Twenty First Century Fox Inc’s shares rose 8 percent on Wednesday as an approval for AT&T’s buyout of Time Warner Inc spurred speculation that Comcast Corp would proceed with an offer for most of the media company’s assets.

FILE PHOTO: An AT&T logo and communication equipment is shown on a building in downtown Los Angeles, California, U.S., October 29, 2014. REUTERS/Mike Blake/File Photo

Comcast’s proposal, widely expected later in the day, will upend Fox’s $52 billion all-stock deal to be bought by Walt Disney.

A federal judge on Tuesday approved AT&T Inc’s $85 billion buyout of Time Warner, clearing the path for more such deals in a rapidly changing media industry.

Shares of other telecom and media companies such as Sprint Corp, CBS Corp and Discovery Inc were all up around 4 percent in premarket trading. Time Warner rose about 5 percent.

“The implications of the ruling are more relevant for other potential vertical deals,” Simon Flannery, analyst at Morgan Stanley said.

AT&T’s stock, however, was down nearly 4 percent, with at least one analyst raising concerns about the debt the company would absorb as part of the deal.

“Time Warner will be a positive for AT&T’s income statement, at least initially. But it will be a negative for the balance sheet,” said research firm Moffett Nathanson’s Craig Moffett, who downgraded the stock to “sell”.

“The new AT&T will carry an astounding $249 billion of debt.”

Reporting by Laharee Chatterjee in Bengaluru; Editing by Sweta Singh and Saumyadeb Chakrabarty