Will Disney bid spark more deals?
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Comcast's bid brought talk of other media mergers in Europe.
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LONDON, England -- The hostile $54 billion bid by U.S. cable TV giant Comcast for Walt Disney Co. sent waves across the Atlantic, reviving talk of a long-awaited comeback in media takeovers in Europe.
Although European media markets are seen as ripe for consolidation, few major deals have emerged. Comcast's Disney offer could prime the pump, bankers and analysts said.
"What it shows is that we can do deals again," a senior banking source told Reuters. "We're back to 1999-2000. It's great news."
The Comcast bid is the first big media play since the troubled merger of AOL and Time Warner -- the parents of CNN -- and the disastrous creation of Vivendi Universal.
CNN's Jim Boulden says the marriage of distribution with content has been the mantra of big media companies for years.
"Putting more of Disney's prime assets through America's biggest cable television assets makes sense to Comcast," Boulden says.
But will the Comcast bid bring a new round of mergers in the media industry?
European media shares surged on Comcast's offer, with France's Vivendi up as much as 4.4 percent Wednesday and UK record company EMI up 5.5 percent. The DJ European media index was up 1 percent to its highest level in about 18 months.
Media analyst Robert Miller told CNN: "In terms of the movie industry, I think its fascinating, because you are going to have, if you like, three of what Rupert Murdoch likes to call vertically integrated giants -- Time Warner, owner of CNN, obviously, then you've got News Corp. ... And now this one."
Steven Gaydos, executive editor of Variety magazine, told CNN the price of Comcast's Disney bid is almost certain to rise.
"I think people are already talking about the next media merger as if Microsoft or other companies may be interested in putting something together," he said.
A successful bid for Disney would raise the profile of content companies and provide a valuation barometer for media sector deals, Dresdner Kleinwort Wasserstein analyst Richard Menzies-Gow told Reuters.
On Wednesday, Menzies-Gow raised his recommendation on HIT Entertainment, owner of Bob the Builder and other children's characters.
Shares of HIT, often named as a potential Disney acquisition, climbed 6.1 percent to 326 pence.
"I've got to believe a number of deals of this size are in the offing, only because we've had such a paucity of deals in the past 24 months," Ben Tompkins, managing director of investment bank Broadview International in London, told Reuters.
"Companies are back to growth and M&A strategy as opposed to bad news and divestitures. When you consider Comcast-Disney and Vodafone's interest in AT&T Wireless, these are big growth deals, which we haven't had for a few years," he added.
Nevertheless on Thursday there was what CNN's Todd Benjamin called "a lot less follow-through" with only small gains in media shares in Europe.
"I only see this having a limited impacted on Europe's Internet shares," one London-based analyst told Reuters.
CNN's Boulden says the deal may not herald a new wave of consolidation around the world.
"U.S. and European regulators and lawmakers are already worried about media and content concentration. And Comcast says its offer is about better managing Disney's struggling television and film assets," Boulden said.
Media shares have caused great pain for shareholders since the heady days of the Vivendi merger with Universal Studios and Time Warner's merger with AOL. Neither deal worked as advertised..
But analysts say Comcast does have one international company to emulate.
Theresa Wise of management consultants Accenture said: "News Corp. is a really fantastic example. Look at Sky, that's ownership of distribution. And they also own content, because they've got Fox Studios in the U.S. They use Fox Studios content, and they are integrated with newspapers as well."
