Fox drops bid to buy Time Warner

CEO Rupert Murdoch says Time Warner has "refused to engage" in a "highly compelling" offer.

Media magnate Rupert Murdoch
Rupert Murdoch: Time Warner "has refused to engage" with us. News Corp.

Fox announced Tuesday that it has withdrawn its bid to buy Time Warner, which would have joined two of the world's biggest TV content companies.

Last month, Rupert Murdoch's 21st Century Fox and Time Warner confirmed Fox made an unsuccessful bid in June for its rival worth about $80 billion, as it sought to join in on a round of megamergers in the media world.

"Our proposal had significant strategic merit and compelling financial rationale and our approach had always been friendly," Murdoch said in a statement Tuesday. "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."

Last month's bid followed a series of proposed megamergers that could shake up the dynamic between some of the world's biggest media companies and service providers. Comcast is seeking approval for its $45.2 billion acquisition of Time Warner Cable, which would merge the nation's two largest cable companies, and AT&T has agreed to buy satellite TV provider DirecTV for $48.5 billion in a deal that would join the country's top satellite provider with the second-biggest wireless carrier. (Time Warner is a separate company from Time Warner Cable, having spun off the cable provider in 2009.)

A Fox-Time Warner combination, which would join two of the biggest television content companies in the world, could counterbalance those gigantic combinations on the television distribution side, potentially giving the two programmers greater leverage when negotiating for content fees from the TV service providers. However, it would further concentrate the television landscape, in which only nine companies are responsible for the vast majority of TV content already.

Fox on Tuesday also announced that it's authorized a $6 billion share repurchase program, which could cheer up disappointed shareholders.

Fox shares are up almost 7.5 percent in after-hours trading, while Time Warner shares are down 9 percent.

CNET's Ben Fox Rubin contributed to this report.

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