Fox withdraws $71bn bid for Time Warner
Rupert Murdoch’s 21st Century Fox has abandoned a $71bn offer for Time Warner.
The news brought an early end to what promised to be a lengthy battle between two of the industry’s biggest names.
Most analysts had expected Rupert Murdoch to return with an improved offer after the company’s first proposal was rejected. But people familiar with the situation told the FT that no new bid would be forthcoming. “We’re done,” a person close to the company said.
Fox first discussed abandoning the bid on Monday at a meeting in the fifth-floor office of the company’s historic Hollywood studio. The board then authorised the withdrawal on Tuesday. The company also launched a $6bn share buyback programme.
Jeff Bewkes, Time Warner’s chief executive, had vigorously opposed the offer, saying it undervalued the company. Time Warner, which owns CNN, HBO and the Warner Brothers studio, also expressed concern about the structure of the bid, which contained a large proportion of non-voting Fox shares.
One motivation for Fox’s interest in Time Warner was Comcast’s recent agreed purchase of Time Warner Cable, a deal which is being scrutinised by regulatory authorities.
The Comcast-TWC tie-up will create the world’s largest cable company, which has alarmed some content producers which will have to negotiate distribution agreements with a much larger entity.
A combined Fox-Time Warner would have been able to command better terms for its cable networks and other programming, analysts said.
However, Fox will have to find other ways to expand. “21st Century Fox’s future has never been brighter,” said Mr Murdoch in a statement.
Source: ft
