Rupert Murdoch’s 21st Century Fox has scrapped its bid to take over Time Warner, a move that would have created a media behemoth and was widely seen as the crowning deal of Murdoch’s mogul career.
The company announced Tuesday that it was withdrawing the $80bn bid after Time Warner “refused to engage with us”. Fox said it would instead buy back $6bn of its own shares. It made the announcement as US stock markets were closing and a day ahead of releasing its latest quarterly results.
Despite a sharp rejection by Time Warner, many commentators thought that Murdoch would be back, citing his previous determination to get a property he had set his sights on, instead he decided to withdraw his proposal to acquire Time Warner.
Chairman and CEO Rupert Murdoch commented:“We viewed a combination with Time Warner as a unique opportunity to bring together two great companies, each with celebrated content and brands.
“Our proposal had significant strategic merit and compelling financial rationale and our approach had always been friendly. However, Time Warner management and its Board refused to engage with us to explore an offer which was highly compelling. Additionally, the reaction in our share price since our proposal was made undervalues our stock and makes the transaction unattractive to Fox shareholders. These factors, coupled with our commitment to be both disciplined in our approach to the combination and focused on delivering value for the Fox shareholders, has led us to withdraw our offer.
Fox made its unsolicited bid to Time Warner last month. The move was quickly rebuffed by Time Warner chief executive officer Jeff Bewkes who argued it undervalued the company, whose assets include HBO, the Warner movie studio and CNN. Bewkes cited Fox’s dual class share structure, which hands control to the Murdoch family even though they are minority shareholders, “regulatory risks” and the ability of Fox’s management “to govern and manage” a merged company of this size as factors for the rejection.
Analysts had speculated that Fox would have to pay as much as $100bn to secure a deal and that other players, including potentially Silicon Valley giants like Google and Apple, could become involved in a bidding war.
The New York Times said the decision to walk away “represents one of the biggest defeats in Mr. Murdoch’s six-decade career as a daring deal maker.
“Since taking over his family’s small newspaper company, he has built one of the world’s most powerful empires through takeovers driven in part by the sheer force of his will.”
It was said that the NYT acquiring an unwilling Time Warner, a blue-chip name in the media business, was proving to be his biggest challenge to date.
“Succeeding would have been a career-capping triumph, particularly after the damaging phone-hacking scandal in Britain. Had Mr. Murdoch managed to pull it off, he would have virtually doubled the size of the empire he will eventually leave to his two sons, James and Lachlan.”
The 21st Century Fox statement concluded with this outline of the strength of the company, despite the rebuff from Time Warner: “21st Century Fox is the world’s premier portfolio of cable, broadcast, film, pay TV and satellite assets spanning six continents across the globe. Reaching more than 1.5 billion subscribers in approximately 50 local languages every day, 21st Century Fox is home to a global portfolio of cable and broadcasting networks and properties, including FOX, FX, FXX, FXM, FS1, Fox News Channel, Fox Business Network, FOX Sports, Fox Sports Network, National Geographic Channels, MundoFox, STAR India, 28 local television stations in the U.S. and more than 300 channels that comprise Fox International Channels; film studio Twentieth Century Fox Film; and television production studios Twentieth Century Fox Television and Shine Group.
“The Company also provides premium content to millions of subscribers through its pay-television services in Europe and Asia, including Sky Deutschland, Sky Italia and its equity interests in BSkyB and Tata Sky
