In an official statement, 21st Century Fox has announced that it has withdrawn its proposal to acquire Time Warner Inc. Chairman and CEO Rupert Murdoch commented:
“We viewed a combination with Time Warner as a unique opportunity to bring together two great companies, each with celebrated content and brands. 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. Additionally, the reaction in our share price since our proposal was made undervalues our stock and makes 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’s future has never been brighter. The strength of our leading franchises, combined with the power of our emerging growth businesses and the leadership positions of our international enterprises put us on a path for even greater success.”
Fox’s Board has also authorized a $6 billion share repurchase program expected to be completed in the next 12 months. Skittish shareholders reacted favourably to Fox’s announcement, rewarding the company with an 8% surge in after market trading, whilst punishing Time Warner with an 11.9% fall.
The withdrawal came as a surprise. Despite the rejection by Warners for his $80 billion offer, Murdoch had been expected to press for another acquisition attempt during an earnings call tomorrow. For now, it looks like the big six media empires will not be shrunk to five.