Shares of Time Warner were up sharply this morning on news that Rupert Murdoch‘s 21st Century Fox made an $80 billion takeover bid for the company in recent weeks. The New York Times reports that Time Warner’s board, after discussing the proposal at length, “sent a terse letter rejecting the offer, saying the company was better off remaining independent”:
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 company first approached Time Warner in early June, these people said. Chase Carey, the president of 21st Century Fox and a longtime top lieutenant to Mr. Murdoch, met privately with Time Warner’s chief executive, Jeff Bewkes, these people said. Later that month, the company delivered a formal takeover proposal worth $85 in stock and cash for each Time Warner share.
It is unclear what 21st Century Fox’s next steps will be. With the disclosure of the takeover approach, pressure from Time Warner shareholders could mount on Mr. Bewkes to begin talks. About 70 percent of Time Warner shareholders, including many big mutual funds, also own shares in 21st Century Fox.
While the talks between the two companies have thus far been considered friendly, people involved in the discussions said that Mr. Murdoch is determined to buy Time Warner and is unlikely to walk away.