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AT&T Win Unleashes Wave of Investors’ Bets on Next Big M&A Deal

After AT&T Inc. got clearance to buy Time Warner Inc. late Tuesday, investors were quick to bet that a broader wave of mergers is coming.

Takeover speculation sent shares of Lions Gate Entertainment Corp. up the most in almost five months on Wednesday, while Discovery Inc. — another potential media target — climbed as much as 4.7 percent. CBS Corp. and Viacom Inc., the subjects of on-again, off-again merger talks, also rose.

AT&T’s victory in a long legal battle with the Justice Department is expected to give a green light to a wide swath of companies mulling possible deals. The mobile-phone giant says the $85 billion deal to acquire Time Warner will fuel its evolution into a media powerhouse that can go head-to-head with Netflix Inc. and Inc.

“M&A activity across the media and telecommunications landscape has largely been in a holding pattern awaiting the outcome,” Jefferies LLC analyst John Janedis said in a note. “With the deal approved, we think it could spur other M&A activity for the group.”

Comcast Corp. will probably be first to act, escalating its battle with Walt Disney Corp. for 21st Century Fox Inc. assets. While Fox agreed in December to sell its film and TV studios, cable channels and other assets to Disney, Comcast has said it’s prepared to step in with a better offer. Comcast is expected to make a formal offer as early as Wednesday, according to a person with knowledge of the matter.