Comcast refutes WSJ report it is hunting for M&A deals.
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Jun 24, 2021
- Comcast CFO says “the company is not in need of any new assets right now.”
- Rich Greenfield discusses Comcast’s M&A potential on CNBC’s “Squawk Box”.
- Comcast Corp opened about 3% down in the stock market on Thursday.
In a report published on Wednesday, the Wall Street Journal said Comcast Corporation (NASDAQ: CMCSA) was hunting for mergers and acquisitions to expand its footprint further in the streaming landscape. On Thursday morning, however, Comcast dubbed the WSJ report “pure speculation” and highlighted that in a recent analyst event, its CFO already confirmed that “they are not in need of any new assets right now.”
Rich Greenfield’s comments on CNBC’s “Squawk Box”
The WSJ report had said Comcast was looking into a potential tie-up with ViacomCBS. Commenting on the plausibility of such a deal, LightShed Partners’ co-founder, Rich Greenfield, said on CNBC’s “Squawk Box”:
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“Remember, Viacom is not just Viacom anymore. After three years of fighting, Shari Redstone has reunited Viacom with CBS. And CBS can’t be merged with NBC. So, for a transaction like the one predicted in the WSJ report, Comcast probably has to spin off NBC Universal, which I don’t think Brian Roberts wants to do. And Sherry Redstone and Viacom have to break the company apart again. Look, scale is obviously more important. There’s no doubt that NBC Universal needs even more scale on the content side. But I just don’t think that transaction is happening anytime soon.”
According to Greenfield, if Comcast would have wanted to expand via M&A, MGM – a pure content studio would have been more plausible in terms of regulatory approval. Otherwise, without spinning off NBC Universal as a separate company, the likelihood of a major media acquisition for Comcast is very slim.
Could Comcast acquire Roku Inc instead?
The WSJ report also named Roku as a potential acquisition that Comcast might consider. Commenting on that, the LightShed Partners’ co-founder said:
“Four years ago, when Roku was a $6 billion company, we were banging the drum for Comcast to buy Roku and go nationwide. But they didn’t. They like staying in footprint. Roku is now a $50 billion company; you probably have to buy it for $70 billion or even a lot more. It’s just a very large acquisition now. Comcast missed the boat on that.”
Greenfield also highlighted that Comcast shareholders want the company to split into two; the cable business and NBC Universal, which could be acquired or grow through acquisitions.
Comcast shares opened about 3% down on Thursday. On a year-to-date basis, the stock is up more than 10%. At the time of writing, the Philadelphia-based firm is valued at $257 billion and has a price to earnings ratio of 22.15.