Fox said open to offer more than $75 billion for Time Warner
Fox estimates that the combined company could achieve as much as $1.5 billion in cost savings
New York: Twenty-First Century Fox Inc. is willing to pay more than $85 a share for Time Warner Inc., according to a person with knowledge of the matter, a sign Rupert Murdoch is undeterred after being rebuffed in an initial offer for the media company. Time Warner shares soared.
Fox estimates that the combined company could achieve as much as $1.5 billion in cost savings, including through the elimination of overlapping back office, human resources, sales and information technology operations, according to the person, who asked not to be identified because the information is private.
21st Century Fox can confirm that we made a formal proposal to Time Warner last month to combine the two companies, Fox said on Wednesday in a statement. The Time Warner board of directors declined to pursue our proposal. We are not currently in any discussions with Time Warner.
Fox had intended to outline an offer higher than $85 to Time Warner before news of its initial overture was made public.
A deal would reshape the media industry by giving the TV- and-film companies greater leverage in negotiations with cable operators such as Comcast Corp. and Time Warner Cable Inc., who are in the process of their own merger.
By making a higher offer, which would exceed $75 billion, Fox would seek to pull in Time Warner assets such as the TNT and TBS cable networks and premium channel HBO to add to its own stable of media properties, including the Fox movie studio, broadcast network and 24-hour news channel.
Shares jump
Time Warner leapt 23% to $87 in early trading in New York. It had gained 21% this year through yesterday. New York-based Fox rose 1.2% to $35.60. It had climbed less than 1% this year at Tuesday’s close.
Nathaniel Brown, a Fox spokesman in New York, declined to comment on the report when reached by Bloomberg News. Keith Cocozza, a spokesman for New York-based Time Warner, didn’t immediately respond to request for comment.
To appease antitrust regulators, the companies would sell CNN, according to a person with knowledge of the matter, since Fox already has Fox News. Fox and its advisers would also tell regulators that a Fox-Time Warner deal should be allowed to go through given consolidation in the cable industry, including the proposed deal to combine Comcast and Time Warner Cable, the person said.
The New York Times reported Fox’s cash-and-stock proposal earlier. Fox first approached Time Warner in early June, the newspaper reported. Chase Carey, the president of Fox and a longtime top lieutenant to Murdoch, met privately with Time Warner’s chief executive officer, Jeff Bewkes, the newspaper said. Later that month, Fox delivered its formal takeover proposal of $85 a share, the Times said. BLOOMBERG
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