Walt Disney has held talks with Rupert Murdoch’s 21st Century Fox about buying most of the company, including its stake in UK-based Sky, people briefed on the talks said, in a potentially controversial deal that would reshape the media landscape.
The very preliminary talks, which were first reported by CNBC, were not active currently, according to one person who was involved in the negotiations, who added that it was not precluded that Fox might be approached by another media company.
Another person said that Fox was effectively putting itself up for sale and that the likes of Verizon, the US telecom group, Charter Communications, the US cable company, and internet giant Amazon could be looking at buying all or part of its assets.
The talks underline the uncertainty facing big media companies as consumers move away from traditional television viewing towards on-demand and advertising-free streaming.
Fox shares rose more than 7 per cent on the news, pushing its market value above $49bn. The stock price of Disney, which has a market value of nearly $155bn, rose 1.65 per cent.
Under the terms of the discussions that had been held, Mr Murdoch would retain ownership of Fox’s news and sports assets. But the company’s 39 per cent stake in Sky, the European pay-TV broadcaster, would be included in the transaction, as would Fox international channels and businesses, such as Star in India.
Fox has made a bid for the shares in Sky that it does not already own and is currently in the middle of an extensive regulatory review of its merger proposal.
Fox News Channel, the news network which has a large conservative-leaning audience, would not be included in any deal, a person close to the negotiations said.
As part of a deal. Disney would have acquired 21st Century Fox’s cable networks, such as the award-winning FX cable network, giving Disney a broader portfolio of channels and intellectual property to put on the streaming service it is developing.
Fox tried to acquire Time Warner three years ago but was rebuffed and has pursued an independent course since then.
Disney, meanwhile, has made a series of smaller acquisitions, buying the likes of Lucasfilm, Marvel Studios and Pixar.
Media and entertainment companies are facing increasing competition from internet and wireless rivals which are muscling into their territory.
AT&T ended up acquiring Time Warner last year for $84.5bn in a bold effort to integrate a content and distribution company. The deal is still undergoing regulatory scrutiny but could close by the end of the year.
A deal between Fox and Disney would attract regulatory scrutiny because it would combine two of the largest film studios and cable network lenders.
Fox declined to comment; Disney did not respond to requests for comment.