Rupert Murdoch's 21st Century Fox and Time Warner confirmed Wednesday that Fox made an unsuccessful bid last month for its rival worth about $80 billion, as it sought to join in on a round of megamergers in the media world.
While Fox said the two companies aren't in talks, the offer appears to have placed Time Warner in play for a deal, as investors pushed the company's stock up about 16 percent to more than $82 a share.
The New York Times reported the takeover bid earlier Wednesday.
The bid comes after 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 completely 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.
The ultimate result for consumers and their cable bills remains unclear, since now both cable operators and broadcasters are trying to bulk up to gain an edge on each other at the negotiation table, with the final resolution for customers likely coming much later.
Erik Brannon, an IHS Technology analyst, predicted that the result for consumers probably won't be positive, as a combined Fox and Time Warner could counteract efforts to lower content fees from a larger AT&T and Comcast. In other coverage areas, Brannon said a bigger Fox could grow content fees "at record rates," with consumers ending up shouldering the higher costs.
Both companies confirmed the proposal. In a statement, Time Warner -- which operates such networks as HBO and CNN -- said it rejected a proposal from Fox with terms matching valuing the deal at roughly $80 billion, saying that accepting the proposal or pursuing any discussion with Fox wasn't in shareholders' best interest. "The Board is confident that continuing to execute its strategic plan will create significantly more value... and is superior to any proposal that 21st Century Fox is in a position to offer," it said.
Fox released a short statement on Wednesday, saying: "21st Century Fox can confirm that we made a formal proposal to Time Warner last month to combine the two companies. The Time Warner Board of Directors declined to pursue our proposal. We are not currently in any discussions with Time Warner."
The New York Times, citing people familiar with the matter, said Fox in June offered $85 a share in cash and stock for each Time Warner share, a roughly 25 percent premium at the time. Time Warner later confirmed the terms. Fox indicated that as part of the deal it would sell CNN to avoid any possible antitrust concerns, since it already owns rival cable-news channel Fox News.
Bloomberg News came out with a report Wednesday soon after the Times story, saying that Fox was willing to offer more than $85 a share for Time Warner, citing a person with knowledge of the situation.
Fox's statement, however, suggests the likelihood of a revival of a deal is low. The company's stock was down about 1 percent at about $35.
The reported bid comes soon after both 21st Century Fox and Time Warner both split up their respective companies. 21st Century Fox separated its television and entertainment businesses from its slower-growing newspaper and book-publishing operations, which are now a part of News Corp. Time Warner, which owns HBO, CNN, and the Warner Bros. movie studio, recently split from its magazine division, creating a new company called Time Inc. in the process.
The 21st Century Fox empire includes film studio 20th Century Fox, as well as a wide array of television holdings such as Fox Networks, Fox News, and Fox Sports 1, YES Network, the National Geographic Channels, and BSkyB in the UK.
Update at 7 am PT: Adds Time Warner statement and context.
Joan E. Solsman of CNET News contributed to this report.