The offer has been rejected according to US reports. The
move that could reshape the media industry according to analysts.
Time Warner confirmed overnight that it had rejected a cash
and stock offer from 21st Century Fox, saying that it was not in the company's
best interests. The Time Warner
statement said its own strategic plan would "create significantly more value." It also pointed to regulatory risks in a
merger and what it said was "uncertainty" over the value of non-voting shares
of 21st Century Fox. Unlike Time Warner, which has no controlling shareholder,
21st Century Fox is controlled by the Murdoch family, which has 39.4 percent of
the voting rights of the Class B shares.
Rupert Murdoch is said to have planned the deal with his son
James and other close advisers. Both Rupert and James Murdoch were in Australia
this week attending the 50th anniversary of the Australian newspaper.
21st Century Fox
offered 1.531 of its Class A non-voting common shares and $32.42 in cash for
every Time Warner share - or a total of nearly $86.30, a premium of roughly 22
percent to Time Warner's closing price on Tuesday.
Together, 21st Century Fox and Time Warner would become a
colossus with an array of television networks and channels like Fox, Fox News,
FX, TNT and TBS; the premium subscription channel HBO, movie studios like 20th
Century Fox, Warner Bros. and other prominent outlets.
A merger could create problems for organisations like
Netflix in Australia with Foxtel being given access to content ahead of
The move would combine Fox's growing sports business with
the broadcast rights that Time Warner owns for professional and college
basketball and Major League Baseball in the USA.
The combined company would have total revenue of $65
As part of the proposal to buy Time Warner, people briefed
on the proposal said, 21st Century Fox indicated that it would sell CNN to head
off potential antitrust concerns since Fox News competes directly with CNN.
Putting CNN on the auction block would likely stir up a bidding war for the
news channel; both CBS and ABC, a unit of the Walt Disney Company, have long been
viewed as interested suitors.
The New York Times said that for Rupert Murdoch, an
acquisition of Time Warner might be a capstone to his long career. People close
to him have said that he sees such a combination as a natural part of a
consolidating entertainment industry.
Time Warner itself has been part of several of the biggest
mergers of the past few decades, including the merger of Time and Warner in the
1980s and the disastrous $165 billion sale to America Online at the height of
the dot-com boom. An acquisition of Time Warner would be the biggest media deal
since that time.