21st Century Fox has decided to withdraw its unsolicited offer for Time Warner, with its chairman and CEO Rupert Murdoch citing the latter’s refusal to consider it and an 11% fall in Fox’s share price as the reasons.
In a statement, he said: “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. However, Time Warner management and its Board refused to engage with us to explore an offer which was highly compelling. Additionally, the reaction in our share price since our proposal was made undervalues our stock and makes the transaction unattractive to Fox shareholders. 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.”
Murdoch added: “21st Century Fox’s future has never been brighter. The strength of our leading franchises, combined with the power of our emerging growth businesses and the leadership positions of our international enterprises put us on a path for even greater success.”
Fox has also quickly moved by authorising a $6 billion Class A share repurchase programme, which is expected to be completed in the next 12 months.
Meanwhile, Time Warner responded to the withdrawal of the offer by saying: “Time Warner’s Board and management team are committed to enhancing long-term value and we look forward to continuing to deliver substantial and sustainable returns for all stockholders. Time Warner is well positioned for success with our iconic assets, including the world’s leading premium television brand, the world’s strongest ad-supported cable network group, and the world’s largest film and television studio. We thank our stockholders for their continued support”.
Fox lodged its bid, believed to be in the region of $80 billion, for Time Warner in June and officially confirmed it on July 16.
At that time, it said Time Warner’s Board of Directors had declined to pursue its proposal and no discussions were taking place between the two parties.
Sources familiar with the situation say the matter is now closed and no new bid will be forthcoming.