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Is Comcast Poised For a Major Media Acquisition?

  • Reuters, Monday, August 17, 2009 10:13 PM
Comcast has been hoarding cash to better manage its balance sheet. But investors worry that it could also be building a war chest for a splashy acquisition similar to its failed 2004 bid for Disney.

After Comcast CEO Brian Roberts made an audacious $54 billion bid for Disney five years ago, the cable company has never quite shaken off the image of a media wannabe. Investors worry that Comcast might use growing cash reserves to go after names such as Viacom, owner of MTV Networks and Paramount, or Time Warner, which owns CNN, HBO and Warner Bros. Disney is no longer seen as a target.

Despite little evidence of such a move, investors are valuing shares of Comcast at close to historical lows. Analysts say the uncertainty surrounding Comcast's M&A strategy coupled with an earlier decision to slow the rate at which it returns cash to investors have hurt its valuation.

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