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21st Century Fox Says It's Quitting the Hunt for Time Warner

Time Warner 'Refused to Engage With Us to Explore an Offer Which Was Highly Compelling'

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Rupert Murdoch.
Rupert Murdoch. Credit: Drew Angerer/Bloomberg

21st Century Fox said Tuesday afternoon that it had withdrawn its offer to buy Time Warner, a bid that had thrown the media business into a whirlwind of speculation and concern over the concentration of TV and movie business in the hands of one company.

"We viewed a combination with Time Warner as a unique opportunity to bring together two great companies, each with celebrated content and brands," 21st Century Fox Chairman-CEO Rupert Murdoch said in a statement. "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."

The statement comes a day before both companies are set to report their most recent financial results -- and hear questions from analysts about whether a deal should or could happen.

Whether this is the last chapter in Mr. Murdoch's attempt to buy Time Warner is unclear at best. 21st Century Fox also said its board had approved a $6 billion share repurchase program, which is likely to help its share price -- perhaps not coincidentally, a critical factor in any effort to buy Time Warner because the company would have to pay for some of the deal with its stock.

Disappointed Time Warner shareholders who had anticipated that a deal would get done could conversely drive down prices for Time Warner shares, punishing the board for rebuffing the offer.

Fox shares rose by as much as 11% in late trading, according to Bloomberg News, while shares in Time Warner fell as much as 14%.

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