Fox Drops Acquisition Bid for Time Warner5 Aug, 2014 By: Erik Gruenwedel
21st Century Fox Inc. Aug. 5 officially dropped its $80 billion acquisition offer for Time Warner.
In a statement, Fox CEO Rupert Murdoch characterized the proposed union of the two media giants as “unique,” but agreed such a deal should be predicated on friendly terms rather than hostile takeover.
"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," Murdoch said.
Indeed, following Fox's initial offer that Time Warner’s board rejected as insufficient, among other issues, the board revised its bylaws making it more difficult for third parties to convene a shareholders meeting — a tactic often initiated following a hostile takeover attempt.
Media watchdog Media Matters lauded the decision.
“The prospect of Rupert Murdoch buying Time Warner presented real harms to the U.S. and global media landscape,” Angelo Carusone, EVP of Media Matters, said in a statement. “It would given him control of 40% of the cable market and 30% of the movie market. No one should hold that much influence but Murdoch, in particular, has demonstrated that he is far too irresponsible for that amount of power. Today's decision was a victory for the thousands of people who signed our petition urging shareholders to oppose the sale as well as media consumers across the country.”
Both companies release quarterly results Aug. 6.