Despite Time Warner's rejection of 21st Century Fox's whopping $80 billion offer to buy the company last month, it was still assumed by a number of people, that negotiations would be ongoing and that Fox would continue to push its bid. It seemed, perhaps, that Time Warner was even maybe gaming Fox, and looking to up the bid a bit before it said yes.
Well, anyone who thought that was, for lack of a better word, wrong.
Fox has completely withdrawn its bid to buy Time Warner, it was revealed via a statement from Fox Chairman and CEO Rupert Murdoch on Tuesday. What he said, essentially, is that Time Warner refused to play ball, and that Fox shareholders were not happy with the idea.
“We viewed a combination with Time Warner as a unique opportunity to bring together two great companies, each with celebrated content and brands. Our proposal had significant strategic merit and compelling financial rationale and our approach had always been friendly," Murdoch said. "However, Time Warner management and its Board refused to engage with us to explore an offer which was highly compelling."
The transaction also was "unattractive to Fox shareholders," he said, which became apparent given the reaction they had to the proposed deal, namely undervaluing its stock.
" These factors, coupled with our commitment to be both disciplined in our approach to the combination and focused on delivering value for the Fox shareholders, has led us to withdraw our offer."
It was revealed three weeks ago that Fox had made the proposal to buy Time Warner for $80 billion, or 1.531 Class A non-voting common shares and $32.42 in cash per share,
The reason Time Warner gave for rejecting the deal was that it did not have confidence in the Fox's ability to actually handle a company whose combined revenue would have been $65 billion. Plus, the company said it realized that becoming part of Fox would not allow it to go ahead with its own strategy going forward.
Combined, the two companies would have overseen Fox, Fox News, FX, TNT, TBS, HBO, and movie studios like 20th Century Fox and Warner Bros. In essence, such a deal would have even further consolidated the number of companies choosing what media we consume.
It looks like Murdoch made the right call when it comes to Fox stockholders: shares are up nearly 6.5% in after hours trading, after having fallen 1.08% to $31.03 during regular trading.
Shares of Time Warner, meanwhile, have sunk over 11% in after-hours trading, after falling 0.4%, to $85.19 a share, during the day.
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