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article imageTime Warner rejects Rupert Murdoch's bid to buy company for $80B

By John Presta     Jul 16, 2014 in Business
New York - Andrew Ross Sorkin, co-anchor of CNBC's Squawk Box, reported exclusively that Rupert Murdoch's Twenty-First Century Fox has made an $80B takeover bid for Time Warner in cash and stock. That offer was rejected by the Time Warner board, reported Sorkin.
The Fox News and Time Warner merger would make the new company 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 Twentieth Century Fox, Warner Brothers and other high-profile outlets," wrote Sorkin in the New York Times.
Also part of the deal said Sorkin on CNBC, Murdoch would sell Time Warner-owned CNN to head off not only potential antitrust concerns, but the obvious political concerns. Murdoch running another news network just would not fly and Murdoch acknowledges such. A CNN sale will likely ignite a bidding war, with two of the obvious bidders being CBS and Disney-owned ABC News. Both have coveted owning the network.
The report also said that Time Warner was first approached in June by Chase Carey, president of Fox and longtime confidant of Murdoch. Carey met privately with Time Warner's chief executive officer, Jeff Bewkes. After the Time Warner Board was presented with the proposal, it rejected it and sent a "terse" letter to Fox, simply saying it was better off independent.
Business Insider reported that Time Warner released a statement, explained why it rejected the deal:
The Time Warner Board, after consultation with its financial and legal advisors, determined that it was not in the best interests of Time Warner or its stockholders to accept the Proposal or to pursue any discussions with Twenty-First Century Fox. The Board is confident that continuing to execute its strategic plan will create significantly more value for the Company and its stockholders and is superior to any proposal that Twenty-First Century Fox is in a position to offer.
However, speculation is that the deal still could happen and a richer premium price, given Murdoch's determination to consummate the deal.
Shares of Time Warner, Inc. (NYSE: TWX) are soaring in early trading Wednesday on reports of this possible deal. Shares of Time Warner were trading in the low 70 range, and the offer is for $85 per share. Trading in the stock opened at 82.38, up 11.37 (16.01 percent). The stock trading near the $85 mark indicates a counter offer could be coming soon.
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