Time Warner spurns Murdoch's $80-bn offer
17 July 2014
Time Warner has turned down media mogul Rupert Murdoch's $80-billion offer.
However, on news of the bid, Time Warner shares surged nearly 18 per cent in the morning.
According to The New York Times, 21st Century Fox, one of the two huge media conglomerates owned by Murdoch, offered to purchase Time Warner for $80 billion.
The cash-and-stock bid by Murdoch was partly meant to counter consolidation among TV distributors like Comcast-Time Warner Cable (See: Time Warner Cable to merge with Comcast in $45-bn deal) and AT&T-DirecTV (AT&T to buy US satellite-television provider DirecTV for $48.5 bn).
Time Warner said in a statement, ''There were considerable strategic, operational, and regulatory risks to executing a combination with 21st Century Fox'', it said.
Time Warner CEO, Jeffrey Bewkes, also posted a video discussing his rejection of the offer.
Under Jeff Bewkes, Time Warner has shed underperforming assets such as AOL and the Time magazine, which was recently spun-off (Time Warner to spin off Time magazine).
According to analysts, Murdoch's focus is on Time Warners' HBO asset, and it will be difficult to keep him away for long if he kept increasing his offer.
HBO had $1.9 billion in earnings last year, before interest, tax, depreciation and amortization, on revenue of $4.9 billion.
A merger of any Murdoch company with Time Warner will create a print and broadcast giant, with major stakes in the news, sports and entertainment.
The Wall Street Journal, also owned by Murdoch, reported that other than CNN - which he offered to sell to avoid regulatory backlash - the media tycoon wanted to buy all of Time Warner.
His empire includes the 21st Century Fox entertainment wing, and the news and publishing giant News Corp.
Time Warner owns TV channels CNN, TNT and TBS, along with the Warner Bros. movie studio, which includes Batman, Superman and Harry Potter.