Fox has dropped its bid for Time Warner. The surrender was unequivocal; “We’re done, period,” said Chase Carey, Murdoch’s right hand man. Fox was done in by an inclining Time share price and a declining Fox one; a toxic mix for a bid relying on Fox stock as currency.
Murdoch, doubtless grudgingly, immediately spent $6 billion buying Fox stock – a consoling gift to his shareholders. But, everyone asks, is Rupert really done? Hostile takeovers are not his style but neither is backing down. He stalked Dow Jones for months before it fell. When he failed to buy Warner Bros he started the Fox Network. So, what will he do now? The longest odds could be got on what you might assume would be the natural answer for an octogenarian; nothing.
Most analysts think he misjudged Time Warner and its CEO Jeff Bewkes. Murdoch interpreted the slimming operation; spinning off AOL, Cable and Time Inc., as preparation for sale rather than a genuine fitness campaign. Then he went in too low on the offer, making it easy for shareholders to back Bewkes. By the time he reconsidered, the share price differential meant affording a bigger price would be too big a stretch.
However, the logic of the deal; increasing the ammunition and the firepower of a single entity in the content creation and distribution sectors, remains sound. This is a world of emerging competitive networks and – therefore – increased demand for quality content.
It would be embarrassing to come back at Time Warner after so emphatically ruling it out. But then Murdoch has a famously thick skin, and he won’t stay out if someone else goes after them. Meantime, the shareholders and advisors of Viacom and/or AMC are doubtless firing up their calculators.