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Comcast offers $65-billion in cash to lure Fox away from Disney bid

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Comcast Corp offered $65 billion on Wednesday to lure Twenty-First Century Fox Inc away from a merger with Walt Disney Co, launching the first salvo with its 20 percent higher offer and setting up a bidding war between two of the largest U.S. media companies.

Comcast Chief Executive Brian Roberts said he was highly confident regulators would allow Comcast to acquire most of Fox’s media assets after AT&T Inc’s court victory on Tuesday, which allowed it to buy Time Warner Inc for $85 billion.

People walk by the headquarters of 21st Century Fox on June 13, 2018 in New York. Comcast, the giant cable operator, on Wednesday officially made a $65 billion all-cash bid for the majority of Fox.

Spencer Platt/Getty Images

Some analysts see difficulties for Comcast-Fox, which would add Fox’s movie and television studios to Comcast’s NBC Universal, but Roberts said in a letter to Fox that he would offer the same conditions as Disney and promised to fight for the deal in court if necessary.

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Comcast is expected to lead a wave of traditional media companies trying to combine distribution and production to compete with Netflix Inc and Alphabet Inc’s Google. The younger firms produce content, sell it online directly to consumers and often offer lucrative targeted advertising.

A merger between Fox and Comcast would create a company with a stable of well-known media brands and franchises, such as the X-Men superheroes. A combined company would hold the rights to air Fox’s long running TV show “The Simpsons,” the Olympics and Premier League Soccer.

Major sports and news assets including Fox News, Fox Business Network and Fox Sports would be spun off into a separate company.

Shares of Comcast, Fox and Disney were barely changed in after-hours trade.

Comcast in a statement outlined an offer that was similar to Disney’s, including a commitment to the same divestitures. It said that it would agree to litigate any action taken by the Justice Department to block the deal.

Comcast offered $35 per Fox share for the media assets, compared with Disney’s stock offer, worth $29.18 per share at the close of trade on Wednesday.

Comcast also offered a $2.5 billion reverse termination fee if the deal did not go through, the same as Disney. It also offered to pay Fox’s $1.525 billion breakup fee owed Disney, if Fox went with Comcast.

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Comcast said it intended to pursue its $30 billion acquisition of Sky Plc in parallel with its Fox bid. Comcast bid for Sky in April, after Fox’s bid for the remainder of European pay-TV group it did not already own was delayed by regulators.

Fox in a statement said it had received the proposal and would review it.

Justice Department lawyers who tried to stop AT&T’s $85 billion deal expect consumers will lose out as bigger companies raise prices, and some lawyers saw that as a concern in a Comcast-Fox deal which would put two movie studios and two major television brands under one roof.

“One cannot ignore the fact that there’s less independent content to go around,” after the AT&T deal, said Henry Su, an antitrust expert with Constantine Cannon LLP.

Still, the AT&T court fight gave Comcast valuable information about how to structure a Fox deal, said David Scharf, a litigation expert with Morrison Cohen.

“Any deal that’s coming down the pike that’s not baked yet knows the government’s playbook. They know what the government is concerned about,” he said. “They can learn how to structure a deal to make it more palatable.”

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Disney itself has “surgically” structured a transaction that “might be doable,” avoiding Fox Broadcasting and big Fox sports channels, U.S. antitrust chief Makan Delrahim said last week.

“I don’t think either will have a significant advantage over the other,” given that both Disney and Comcast seem motivated to divest what they need to win a deal with Fox, said Ketan Jhaveri, a former Justice Department attorney who served on the telecommunications task force.

Comcast may have a tough time winning over Fox’s largest shareholder, Rupert Murdoch’s family. They own a 17-percent stake and would face a multi-billion dollar capital gains tax bill if he accepted an all-cash offer from Comcast, tax experts have told Reuters.

Craig Moffett, an analyst with MoffettNathanson, said in a research note that Disney could prevail for other reasons.

“Disney has the superior balance sheet, cost of debt, equity and rationale to emerge victorious over Comcast in a bidding war,” Moffett said.

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Pipeline protesters defy eviction order, say they'll meet with officials

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Kwitsel Tatel, left, speaks to media during a press conference at Camp Cloud near the entrance of the Kinder Morgan Trans Mountain pipeline facility in Burnaby, B.C., on Saturday July 21, 2018. THE CANADIAN PRESS/Ben Nelms

BEN NELMS/The Canadian Press

Protesters at an anti-pipeline camp in Burnaby, B.C., say they will meet with officials to discuss safety measures, but they will not comply with a city-issued evacuation order.

The City of Burnaby says there are safety concerns surrounding “Camp Cloud,” including a two-storey wooden watch house and a fire that protesters describe as sacred and ceremonial.

Protest organizer Kwitsel Tatel says the participants will not leave, nor will they extinguish their fire.

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Tatel suggests the structures around the camp’s sacred fire could be modified, if only to refocus the attention away from the physical camp and back to the anti-pipeline protest.

She adds that snuffing out the fire would constitute a breaking of both B.C. Supreme Court and Coast Salish law.

The protesters say the city’s notice, which was issued on Wednesday and expired early Saturday, was written without adequate consideration of a recent court decision or consultation with camp residents.

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2 Uncle Ben's rice varieties recalled in eastern Canada

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Mars Food Canada is voluntarily recalling select Uncle Ben's rice products, including its Fast & Fancy Broccoli and Cheddar, and Country Chicken flavoured rice, after learning about possible salmonella contamination in the seasoning pouches in both products. The recall only affects products sold in eastern Canada.

In a statement, the company said it is conducting the recalls "out of an abundance of caution."

"We are working with a limited number of impacted retailers in eastern Canada to have the product removed from store shelves," it said.

The company said while the majority of affected products have already retrieved, customers should check any packages of rice featuring any of the lot codes listed here. It says affected products should not be consumed.

The recall comes amid a flurry of food product recalls affecting Loblaws and Ritz products. The Canadian Food Inspection Agency said Saturday it is recalling Ritz bits sandwich crackers and No Name chicken nuggets for risk of salmonella contamination.

The breaded nuggets, offered at Maxi, Provigo, AXEP and Intermarché grocery stores in Quebec, were sold in boxes of 907 grams with the best before date "2019 MA 15."

The recalled Ritz crackers were sold in packs of 180 grams, 30 X 42 grams and 42 grams. The best before dates are November 2018 to March 2019. 

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Fiat Chrysler chooses Jeep exec Mike Manley to replace ailing CEO Marchionne

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Fiat Chrysler Automobile announced Saturday that CEO Sergio Marchionne's health had suddenly deteriorated following surgery and that its board of directors had chosen Jeep executive Mike Manley to replace him.

Marchionne, a 66-year-old Italian-Canadian, joined Fiat in 2004 and led the Turin-based company's merger with bankrupt U.S. carmaker Chrysler. Manley, 54, had been heading the Jeep brand since June 2009 and the Ram brand from October 2015.

The announcement, at the end of an urgently convened board meeting, marked the end of the Marchionne era, which included the turnaround of failing Fiat, the takeover of bankrupt U.S. automaker Chrysler and the spinoffs of the heavy machinery and truck maker CNH and supercar maker Ferrari.

Fiat Chrysler said in a statement that due to his deteriorating health Marchionne "will be unable to return to work."

Marchionne, 66, had already announced he would step down in early 2019, so the board's decision, to be confirmed at an upcoming shareholders' meeting, will "accelerate" the CEO transition process, the statement said.

Chrysler CEO Sergio Marchionne, left, is seen with Jeep brand President and CEO Mike Manley at the Jefferson North Assembly Plant, in Detroit. (Carlos Osorio/Associated Press)

The British-born Manley had been one of Marchionne's closest collaborators at the group, and in a previous role had been responsible for product planning and all sales activities outside of North America.

Marchionne was reported to have had surgery for a shoulder problem about three weeks ago in Switzerland.

Fiat is considered a close-knit family, and FCA chairman John Elkann said he was "profoundly saddened to learn of Sergio's state of health. It was a situation that was unthinkable until a few hours ago, and one that leaves us all with a sense of injustice."

Elkann didn't give details of Marchionne's health problems, adding that his "first thoughts go to Sergio and his family." He asked everyone to respect Marchionne's "privacy and that of all those who are dear to him."

Elkann is a grandson of the late Gianni Agnelli, the longtime Fiat dynasty chieftain.

The boards of Ferrari and CNH Industrial, which makes heavy machinery and trucks, were called urgently to meet on Saturday in Turin, Fiat's headquarters.

Ferrari announced that Louis Camilleri, an Egyptian-board Maltese and longtime executive at Philip Morris International, the tobacco company, was chosen to replace Marchionne as CEO of the sports car maker. 

A Fiat Chrysler sign is seen outside the Chrysler World Headquarters in Auburn Hills, Mich., in this file photo. (Carlos Osorio/Associated Press)

Known for sleeping only briefly each night, Marchionne, who is also a lawyer, was holding multiple leadership roles in the companies, notably as CEO of FCA — Fiat Chrysler Automobiles, as well as CEO and chairman of Ferrrari.

In early June, Marchionne made his last major presentation as CEO of Fiat Chrysler. On that occasion he announced there would be a major investment thrust to make more electrified cars, although traditional engines will continue to dominate production. He unveiled FCA's plans through 2022.

Brands that have been driving the company's revenues include Jeep SUVs, Ram trucks and the premium brands, Maserati and Alfa Romeo. Those brands were expected to account for 80 per cent of revenues by 2022, compared to 65 per cent currently.

The passenger-car brands of Fiat and Chrysler have been less profitable.

At the June appearance, Marchionne also predicted Fiat was about to eliminate its debt.

Next corporate results are set to be released on July 25.

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