Newspaper article International New York Times

Murdoch Puts a Rival Media Giant in His Sights ; Time Warner Says No, but Analysts Suspect the Battle Has Only Begun

Newspaper article International New York Times

Murdoch Puts a Rival Media Giant in His Sights ; Time Warner Says No, but Analysts Suspect the Battle Has Only Begun

Article excerpt

While his initial overture of $80 billion was rebuffed, the mere fact of that show of interest by Rupert Murdoch could put Time Warner in play.

The media giant 21st Century Fox, the empire run by Rupert Murdoch, has made an $80 billion takeover bid for Time Warner Inc.

And while his initial overture was rebuffed, the mere fact of that show of interest by Mr. Murdoch could put Time Warner in play - - and might set off yet another reshaping of the media industry, prompting a new spate of mega-mergers among the largest entertainment companies in the United States.

Mr. Murdoch has built a global media juggernaut over nearly five decades spanning studios, television channels and newspapers, in part by pursuing bold deals whose targets often rebuffed him at first, only later to acquiesce.

If a merger were to happen, the company would become a colossus with the movie studios 20th Century Fox and Warner Bros.; an array of television networks and channels like Fox, Fox News, FX, TNT and TBS; the premium subscription channel HBO; and other prominent outlets.

It would also combine Fox's growing sports business with the broadcast rights that Time Warner owns for professional and college basketball and Major League Baseball, among other sports. The combined company would have total revenue of $65 billion.

Time Warner confirmed on Wednesday that it had rejected a cash- and-stock offer from 21st Century Fox in recent weeks, saying that it was not in the company's best interests. The Time Warner statement pointed to its own strategic plan, what it said was "uncertainty" over the value of 21st Century Fox stock, and regulatory risks as among the reasons for its rebuff.

The company said that 21st Century Fox had offered 1.531 of its Class A non-voting common shares and $32.42 in cash for every Time Warner share -- or a total of nearly $86.30, a premium of roughly 22 percent to Time Warner's closing price on Tuesday.

Earlier on Wednesday, 21st Century Fox also confirmed that it had made a formal offer to Time Warner last month. "The Time Warner board of directors declined to pursue our proposal," the statement said. "We are not currently in any discussions with Time Warner."

Shares of Time Warner were up about 16 percent in New York trading on Wednesday afternoon.

As part of the proposal to buy Time Warner, people briefed on the proposal said, 21st Century Fox indicated that it would sell CNN to head off potential antitrust concerns, since Fox News competes directly with CNN.

The Murdoch company first approached Time Warner in early June, these people said. Chase Carey, the president of 21st Century Fox and a longtime top lieutenant to Mr. Murdoch, met privately with Time Warner's chief executive, Jeff Bewkes, they said.

A combination would create at least $1 billion in cost savings, 21st Century Fox estimated, primarily by cutting sales staff and back-office functions, these people said. …

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