Rupert Murdoch’s 21st Century Fox has withdrawn its $75 billion proposal to buy Time Warner because the rival company “refused to engage with us.”
“We viewed a combination with Time Warner as a unique opportunity to bring together two great companies, each with celebrated content and brands,” said Murdoch.
“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.”
Murdoch added that a fall in 21st Century Fox’s share price since its cash-and-stock takeover proposal for Time Warner was confirmed last month undervalued Fox stock and made 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.”
21st Century Fox shares jumped around 7 per cent in after hours trading today after the news that Murdoch had dropped the bid, while Time Warner shares fell 9 per cent.
Both companies report earnings today, when investors and analysts will be able to grill both firms’ executives.
Brett Harriss, analyst with Gabelli & Co, a fund management firm with expertise in the media, told Reuters he did not believe this would be the end of the Time Warner-21st Century Fox merger speculation.
“This could easily be part of their negotiating strategy,” he said, adding that Time Warner’s management could be placed under pressure for not negotiating a better offer for shareholders.
21st Century Fox also said it now plans to buy back $6 billion of its stock.