Rupert Murdoch's 21st Century Fox has abandoned its $80-billion offer for rival media giant Time Warner.
The media mogul said Tuesday that combining the two companies would have been a “unique opportunity” but he wanted his bid to be friendly. Time Warner board members had dug in with their resistance, and Murdoch said he did not want to engage in a protracted and hostile battle.
Murdoch's move was a stunning reversal following the company's disclosure last month that it wanted to buy Time Warner, which boasts such assets as HBO, CNN, TNT, Cartoon Network and Warner Bros., Hollywood's largest television and movie studio.
Most analysts had expected Murdoch to up Fox's offer to more than $90 billion in an effort to create a global media colossus. Instead, Fox said it would spend $6 billion of its war chest to buy back its own shares in an effort to raise the value of Fox.
"Our proposal had significant strategic merit and compelling financial rationale and our approach had always been friendly," Murdoch said in a statement. "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."
Time Warner shares plunged more than 11% to $75.50 in after-hours trading after its stock surged since the offer was disclosed last month. Meanwhile, 21st Century Fox’s Class A shares surged 8% to $33.70 in after-hours trading.
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