21st Century Fox has withdrawn its proposal to acquire Time Warner.
In a Statement, 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,” declared Murdoch. “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.”
The 21st Century Fox Board has authorised a $6 billion share repurchase programme. The repurchase of an additional $6 billion of Class A Common Stock is expected to be completed in the next 12 months.
Murdoch said the “significant” return of capital underscored the Company’s ongoing commitment to disciplined capital allocation and returning value to shareholders in a meaningful way.
In rejecting an $85-per-share bid, Time Warner said its own growth plan was “superior to any proposal that 21st Century Fox is in a position to offer”. Time Warner’s board also changed its by-laws to eliminate the right of shareholders to call a special meeting. That move delayed any effort by Fox to replace the company’s board until the next annual meeting, which is typically held in June.
In its own Statement, Time Warner said that its Board and management team were committed to enhancing long-term value and looked forward to continuing to deliver substantial and sustainable returns for all stockholders. “Time Warner is well positioned for success with our iconic assets, including the world’s leading premium television brand, the world’s strongest ad-supported cable network group, and the world’s largest film and television studio. We thank our stockholders for their continued support,” it concluded.