Rupert Murdoch and 21st Century Fox has rescinded its offer to buy Time Warner, the move could have ramifications in Australia as IPTV suppliers battle to cut content deals.
Murdoch who was recently in Australia has blamed Time Warner management who he has accused of not wanting to talk to him.
Murdoch took to the airwaves blaming Time Warner for the breakdown, saying that “Time Warner management and its board refused to engage with us to explore an offer which was highly compelling.”
One of Time Warner’s Companies is HBO who recently sold their shares in Quickflix to Nine Entertainment.
HBO is now looking at setting up their own streaming service. The Company is currently licensing their Game of Throne Series to Foxtel however this could end if Murdoch fails to get control of Time Warner.
The Murdoch owned newspaper the Wall Street Journal said that HBO was looking to expand into Countries that have good broadband infrastructure and where HBO does not generate much revenue from licensing its programming.
Currently the US market accounts for around three-quarters of HBO’s $4.9 billion annual revenues, the Company sees growth opportunities increasingly limited in the USA which is why they are looking to markets like Australia, Europe and Asia to grow.
Investments that the Company have made in markets outside Australia are growing rapidly and would be complemented by expanding web-TV offers to more markets like Australia as opposed to buying into operations such as Quickflix.
The Murdoch offer to Time Warner was based on an offer for $85 per share, plus cash.
“The reaction in our share price since our proposal was made undervalues our stock and makes the transaction unattractive to Fox shareholders,” Murdoch said overnight. Murdoch is going to take advantage of the share price drop, and repurchase $6 billion in stock over the next year.
