Murdoch Bids $80 Billion For Time Warner CNN To Be Sold

Written by David Richards     17/07/2014 | 06:14 | Category: INDUSTRY

Rupert Murdoch a 50% owner of Foxtel and the 21st Century Fox, the empire run by Rupert Murdoch, has made an $80 billion takeover bid for Time Warner Inc. who also own CNN and HBO.

Murdoch Bids $80 Billion For Time Warner CNN To Be Sold

The offer has been rejected according to US reports. The move that could reshape the media industry according to analysts.

Time Warner confirmed overnight that it had rejected a cash and stock offer from 21st Century Fox, saying that it was not in the company's best interests.  The Time Warner statement said its own strategic plan would "create significantly more value."  It also pointed to regulatory risks in a merger and what it said was "uncertainty" over the value of non-voting 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 the Class B shares.

Rupert Murdoch is said to have planned the deal with his son James and other close advisers. Both Rupert and James Murdoch were in Australia this week attending the 50th anniversary of the Australian newspaper.

 21st Century Fox offered 1.531 of its Class A non-voting 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.

Together, 21st Century Fox and Time Warner would become a colossus with an array of television networks and channels like Fox, Fox News, FX, TNT and TBS; the premium subscription channel HBO, movie studios like 20th Century Fox, Warner Bros. and other prominent outlets.

A merger could create problems for organisations like Netflix in Australia with Foxtel being given access to content ahead of Netflix.

The move would combine Fox's growing sports business with the broadcast rights that Time Warner owns for professional and college basketball and Major League Baseball in the USA.

The combined company would have total revenue of $65 billion.

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

The New York Times said that for Rupert Murdoch, an acquisition of Time Warner might be a capstone to his long career. People close to him have said that he sees such a combination as a natural part of a consolidating entertainment industry.

Time Warner itself has been part of several of the biggest mergers of the past few decades, including the merger of Time and Warner in the 1980s and the disastrous $165 billion sale to America Online at the height of the dot-com boom. An acquisition of Time Warner would be the biggest media deal since that time.