The media empire administered by billionaire Rupert Murdoch would have grown exponentially had Time Warner Inc. accepted an impressive offer last month to be bought by Murdoch’s 21st Century Fox.
On Tuesday morning, the New York Times revealed for the first time that Murdoch’s conglomerate offered Time Warner $80 billion in late June, a deal which would have awarded the octogenarian with the third largest broadcasting and cable company in the world in terms of revenue if it had been accepted.
Murdoch’s multinational corporation currently includes Fox News as one of its major assets, and separate conglomerates overseen by the mogul provide him with control of media entities including the New York Post, Wall Street Journal and Dow Jones. Had the deal worked out, 21st Century Fox would have acquired Time Warner’s impressive cable channel business, which includes the HBO, TNT and TBS network, as well as Fox News’ main competitor: CNN.
According to CNN, which is owned by Time Warner, execs were “prepared to fight” any takeover attempt by Murdoch. Already, 21st Century Fox controls the Fox and FX networks, along with a stable of Hollywood studios and other entities. For $80 billion, however, the failed deal would have also brought onboard the Warner Bros. movie house and its impressive roster of films, while at the same time further concentrating the narrowly controlled American news media into the hands of fewer individuals. Presently, roughly a half-dozen corporations control around 90 percent of the US media.
Despite the high-priced wager, the Times reported that the offer made by 21st Century Fox last month was ultimately rejected. After the Times article broke news of the story early Wednesday, both parties acknowledged that the deal had been offered but rejected.
In a statement early Wednesday, Time Warner explained:
“In making its determination, the Time Warner Board considered, among other things, that: The execution of Time Warner’s strategic plan will continue to drive significant and sustainable value for Time Warner stockholders; the unique value of Time Warner’s industry-leading businesses including its portfolio of networks and its film studio and television production business is only going to increase; 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; and there are considerable strategic, operational, and regulatory risks to executing a combination with Twenty-First Century Fox.”
“The board is confident that continuing to execute its strategic plan will create significantly more value for the company and its stockholders and is superior to any proposal that 21st Century Fox is in a position to offer,” continued the statement. “The unique value of Time Warner’s industry-leading businesses including its portfolio of networks and its film studio and television production business is only going to increase.”
According to the Times, 21st Century Fox offered Time Warner 1.531 of its Class A non-voting common shares and $32.42 in cash for every Time Warner share, coming to around $86.30 apiece.
”The Time Warner board of directors declined to pursue our proposal,” Murdoch’s company responded to reports on Wednesday. “We are not currently in any discussions with Time Warner.”
Despite the deal being rejected, word of the would-be agreement early Wednesday cause Time Warner’s stock to suddenly spike. Now in the aftermath of the news being made public, reports are already circulating suggesting that Murdoch might pursue the purchase notwithstanding Time Warner’s reluctance.
On Wednesday, Reuters reported that Murdoch and company are unlikely to abandon the buy-out, according to a source familiar with the negotiations, because the mogul is brimming with “disciplined determination” if nothing else.