21st Century Fox Withdraws $80 Billion Bid for Time Warner

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Following news last month that 21st Century Fox had made a formal proposal to Time Warner to combine the two companies for $80 billion, 21st Century Fox now says they have withdrawn the offer. Here is the full statement:

21st Century Fox today announced that it has withdrawn its proposal to acquire Time Warner Inc.

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. 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 Board today authorized a $6 billion share repurchase program. The repurchase of an additional $6 billion of Class A Common Stock is expected to be completed in the next 12 months.

Mr. Murdoch continued, “This significant return of capital underscores the Company’s ongoing commitment to disciplined capital allocation and returning value to shareholders in a meaningful way.”

Time Warner issued the following statement in response to 21st Century Fox’s withdrawal:

“Time Warner’s Board and management team are committed to enhancing long-term value and we look 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.”

If the deal 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.

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