Fox fails in $80BN play for Time Warner

Michelle Clancy | 17 July 2014

Rupert Murdoch's 21st Century Fox has failed in an $80 billion takeover bid for Time Warner Inc.

The company had hoped to create a media juggernaut that housed television networks and channels like FOX, FOX News, FX, TNT and TBS; the premium subscription channel HBO, movie studios that include 20th Century Fox and Warner Bros. However, CNN would have been divested to prevent a conflict with rival cable net FOX News.

A deal also would have combined a significant portfolio of sports rights, including Major League Basketball and Major League Baseball, along with regional sports rights and international football.

The combined company would have had total revenue of $65 billion.

Time Warner though rejected the cash and stock offer, and in a statement said that it had a strategic plan that on its own would "create significantly more value."

In an official statement, the Time Warner board said that it had considered the execution of Time Warner's strategic plan that it believes will continue to drive significant and sustainable value for its stockholders. In addition the board noted that its portfolio of networks and its film studio and television production business was going to increase but that there was "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. Furthermore Time Warner expressed concern about "considerable" strategic, operational, and regulatory risks to executing a combination with Twenty-First Century Fox.

For its part, Fox said in a statement that "the Time Warner board of directors declined to pursue our proposal", adding "We are not currently in any discussions with Time Warner."

Time Warner recently spun off its legacy print publications, after less recently shedding AOL and Time Warner Cable, setting itself up for digital growth and, analysts have said, attractive acquisition offers. CEO Jeff Bewkes, however, has long maintained that he has no interest in a deal.

Murdoch recently took a similar approach to his holdings, separating its video and media assets from the print division (which includes the Wall Street Journal, New York Post, HarperCollins publishing and other parts of News Corp).