Time Warner Rejected Rupert Murdoch’s $80 Billion Takeover Bid
UPDATE: July 15, 5:41 pm EST Bloomberg quotes two billionaire money managers — Ken Griffin, CEO of hedge-fund firm Citadel and Mario Gabelli, CEO of Gamco Investors say Murdoch’s offer will be hard for Time Warner to resist.
21st Century Fox, the massive media conglomerate controlled by the Murdoch family, put in a massive acquisition offer for Time Warner worth about $80 billion in a proposal to make one of the biggest media companies in the world.
Time Warner’s board promptly rejected it.
21st Century Fox and Time Warner both confirmed the bid to Mashable, backing up a report from the New York Times.
The offer, which was made in early June, was worth approximately $80 billion and would have been a mix of 60% stock and 40% cash, according to the Times. That price tag puts that offer at around $85 per share for Time Warner and is about a 20% premium on the company’s Tuesday closing price of $71.01. Time Warner shares rose sharply in after-hours trading on the news, up about 17%.
“21st Century Fox can confirm that we made a formal proposal to Time Warner last month to combine the two companies. The Time Warner Board of Directors declined to pursue our proposal. We are not currently in any discussions with Time Warner,” 21st Century Fox said in a statement.
Rumors swirled recently that Rupert Murdoch, the patriarch of the Murdoch family and the CEO and chairman of 21st Century Fox, had been making a move for Time Warner. His other company, News Corp, is said to be considering a bid for major newspapers owned by Tribune.
The deal would have united two of the largest media companies. 21st Century Fox has a variety of holdings, including movie studio 20th Century Fox; TV stations like Fox Broadcasting Channel, Fox News and FXX; and a variety of overseas TV channels. Time Warner also operates a mix of assets that include New Line Cinema, HBO, Turner Broadcasting and DC comics.
The combined market capitalization of a united Time Warner and 21st Century Fox would be around $141 billion with yearly revenue of about $65 billion. Those numbers would make it one of the biggest media companies in the world and rival giants like Disney and Comcast.
Massive mergers such as this are subject to heightened regulatory scrutiny. 21st Century Fox was prepared to sell off some assets of Time Warner, most notably CNN, in order to get the deal through, according to the Times. Media mergers have been a hot topic as of late, with deals such as Comcast’s pending acquisition of Time Warner Cable and AT&T’s move for DirecTV fueling analyst speculation that more deals are to come.
The Times reported that the mix of stock and cash concerned Time Warner’s board of directors. 21st Century Fox is controlled by the Murdoch family due to the company’s stock structure, which issues voting and non-voting shares. The deal included nonvoting shares, the Times said.
“There is significant risk and uncertainty as to the valuation of Twenty-First Century Fox’s non-voting stock and Twenty-First Century Fox’s ability to govern and manage a combination of the size and scale of Twenty-First Century Fox and Time Warner,” Time Warner said in a statement.
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