21st Century Fox confirmed today that they made a formal proposal to Time Warner Inc. last month to combine the two companies for $80 billion, but the Time Warner Board of Directors declined their proposal. They added that they are not currently in any discussions with Time Warner.
Time Warner Inc. added that 21st Century Fox’s proposal was to acquire all of the outstanding shares of the company for a combination of 1.531 of 21st Century Fox Class A non-voting common shares and $32.42 in cash per share.
“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,” they said.
In making its determination, the Time Warner Board considered, among other things, that:
“- The execution of Time Warners strategic plan will continue to drive significant and sustainable value for Time Warner stockholders;
- The unique value of Time Warner’s industry-leading businesses including its portfolio of networks and its film studio and television production business is only going to increase;
- There is significant risk and uncertainty as to the valuation of Twenty-First Century Fox’s non-voting stock and Twenty-First Century Fox’s ability to govern and manage a combination of the size and scale of Twenty-First Century Fox and Time Warner; and
- There are considerable strategic, operational, and regulatory risks to executing a combination with Twenty-First Century Fox.”
If this had happened, it would have been very significant, considering Time Warner’s subsidiaries include New Line Cinema, HBO, TBS, The CW, Warner Bros., Kids’ WB, Cartoon Network, Boomerang, Adult Swim, CNN, DC Comics, Warner Bros. Animation, Cartoon Network Studios, Hanna-Barbera, MLB Network and Castle Rock Entertainment.
21st Century Fox’s subsidiaries include the Fox Entertainment Group (20th Century Fox, FOX), STAR TV, Sky Italia and stakes in BSkyB and Sky Deutschland.