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Time Warner rebuffs $80b bid from Murdoch

Woody Harrelson (left) and Matthew McConaughey starred in the HBO series “True Detective.” Home Box Office is a subsidiary of Time Warner.HBO via Associated Press

NEW YORK — The media giant 21st Century Fox, run by Rupert Murdoch, made an $80 billion takeover bid in recent weeks for Time Warner Inc. but was rebuffed.

The bold approach could put Time Warner in play and might again ignite a reshaping of the media industry, prompting megamergers among the largest entertainment companies.

Over nearly five decades, Murdoch, 83, has built a global juggernaut spanning studios, television channels, and newspapers, in part by pursuing bold deals that were often rebuffed at first by targets that would later acquiesce.

Time Warner on Wednesday confirmed it had rejected a cash-and-stock offer from 21st Century Fox. It said its own strategic plan would “create significantly more value.”


It also pointed to regulatory risks in a merger and “uncertainty” over the value of nonvoting shares of 21st Century Fox. Unlike Time Warner, which has no controlling shareholder, 21st Century Fox is controlled by the Murdoch family, which has 39.4 percent of the voting rights of Class B shares.

Time Warner said 21st Century Fox offered 1.531 of its Class A nonvoting 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. Time Warner’s stock closed up 17 percent to $83.13 on Wednesday.

Together, 21st Century Fox and Time Warner would be a colossus with an array of such television networks and channels as Fox, Fox News, FX, TNT, and TBS; the premium subscription channel HBO; movie studios 20th Century Fox and Warner Bros.; and other prominent outlets. It would also combine Fox’s growing sports business with the broadcast rights Time Warner owns for professional and college basketball and Major League Baseball, among other sports.

A combined company would have revenue of $65 billion.


People briefed on the proposal said 21st Century Fox indicated it would sell CNN to head off potential antitrust concerns, since Fox News competes directly with CNN. Putting CNN on the auction block would probably stir up a bidding war for the news channel; both CBS and ABC, a unit of Walt Disney Co., have long been viewed as interested suitors.

Time Warner has over several years spun off AOL, Time Warner Cable, and publications such as Time and Fortune, leaving an entertainment company many analysts think would be an attractive asset. Murdoch’s empire has also been split, with The Wall Street Journal, The New York Post, the publisher HarperCollins, and other assets forming News Corp.

21st Century Fox first approached Time Warner in early June, the people briefed on the matter said. 21st Century Fox said it would raise $24 billion to help pay for the deal and stressed that its bid was not dependent on financing.

The company estimated a combination would create $1 billion in cost savings and possibly more, primarily by cutting sales staff and back-office functions.

Time Warner’s board discussed the bid, the people briefed said, and on July 8 said no. It is unclear what 21st Century Fox’s next step will be. People involved in the talks say Murdoch is not apt to walk away.

Sweeping portfolios

Here’s a look at some of the assets each company owns and some of the movies and TV shows they have produced.


TV networks: Cartoon Network, CNN, HBO, TBS, TNT


Studios: Warner Bros. Pictures, Telepictures Productions

Movies: ‘‘The Lego Movie,’’ “Godzilla,’’ “Edge of Tomorrow’’

TV shows produced: ‘‘2 Broke Girls,’’ “Arrow,’’ “Two And a Half Men,’’ “The Vampire Diaries’’

Famous characters: Batman, Superman, Bugs Bunny


TV networks: Fox Broadcast, Fox News, Fox Sports, FX, YES Network

Studios: Twentieth Century Fox, Blue Sky Studios

Movies: ‘‘Dawn of the Planet of the Apes,’’ “Ice Age: Continental Drift,’’ “Rio 2,’’ “X-Men,’’ “Avatar’’

TV shows produced: ‘‘Modern Family,’’ “American Horror Story,’’ “Glee,’’ “The Simpsons’’