Walt Disney Co, the second-largest media company, may buy cable-TV network owner Fox Family Worldwide Inc for about US$5.3 billion in cash and assumed debt, the Wall Street Journal reported in its online edition.
Disney appears to be the company most likely to buy Fox Family, the Journal reported, citing people familiar with the situation. News Corp, which owns half of Fox Family, also is holding parallel negotiations with AOL Time Warner Inc and Viacom Inc, according to the newspaper.
Disney, which already owns the Disney Channel and ESPN cable networks, has said it's interested in buying more cable networks or other media properties. Fox Family would give it another outlet for its TV studios, which have turned out classic children's programming such as Mickey Mouse cartoons and The Lion King.
"The strategic fit of Fox Family is perfect" for Disney, said Jordan Rohan, an analyst at Wit SoundView, who has a "buy" rating on Disney shares.
"While the price may raise some eyebrows, Disney's ability to leverage a fully distributed cable network is nearly unparalleled."
"Disney's desire to expand its sports, family and general entertainment-oriented cable networks will be realized," Rohan said.
"Cost savings will be significant if Disney can further leverage its vast content library through this acquisition."
News Corp was looking for a buyer for Fox Family after its partner, children's television producer Haim Saban, exercised an option that otherwise would have forced News Corp to buy out his roughly half interest. Saban is the creator of hit television shows, including Mighty Morphin Power Rangers and Teenage Mutant Ninja Turtles.
The purchase would come as Disney shares have fallen 17 percent in the past two months.
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