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July 17, 2014

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Fox bid for Time Warner rejected

RUPERT Murdoch’s Twenty-First Century Fox said it made a bid to buy media conglomerate Time Warner Inc but was rebuffed.

The bid was worth roughly US$80 billion, or US$85 per share in cash and stock, according to a source.

Time Warner’s stock jumped 22.5 percent to US$87 pre-market as the New York Times reported that Murdoch was determined to buy Time Warner and was unlikely to walk away despite the rejection. Twenty-First Century Fox confirmed it had made the formal proposal to Time Warner last month.

“The Time Warner Board of Directors declined to pursue our proposal. We are not currently in any discussions with Time Warner,” Twenty-First Century Fox said yesterday.

Time Warner was not immediately available for comment.

Media reported this month that Murdoch is in the midst of a deal that would give Fox the firepower to buy a content company. Fox first approached Time Warner, owner of the Warner Bros movie studio and cable channels such as HBO and CNN, in early June and delivered a formal takeover proposal later that month, the Times reported, citing sources.

Fox, which owns movie studio 20th Century Fox and cable news channel Fox News, offered to sell CNN as part of its proposal to buy Time Warner to clear any regulatory hurdles, the Times said.

“I think fair public value is US$82. (It) would be good deal for Fox if it goes through Washington (regulators) with the CNN sale,” said Wunderlich Securities analyst Matthew Harrigan.

Time Warner’s board discussed the proposal at length and sent a terse letter rejecting the offer earlier this month, saying that it was better off remaining independent, the newspaper said, adding that the deal fell through because the stock portion of Fox’s offer consisted of non-voting shares.

Fox had estimated that a combined company would save US$1 billion in costs and possibly more, primarily by cutting sales staff and back-office functions, the paper said.

The combined firm’s revenue would be over US$60 billion.

Twenty-First Century Fox is in the middle of a reorganization of its television business as the network seeks to lift itself out of last place among the big United States broadcasters.

The shakeup of Fox’s TV units also comes a year after the film and TV firm was spun off from Murdoch’s News Corp, which now operates publishing assets, like the Wall Street Journal.




 

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