Mario Gabelli, the chairman and CEO of GAMCO Investors, has only good words about Time Warner Inc (NYSE:TWX) and Twenty-First Century Fox Inc (NASDAQ:FOX), even if the takeover deal between the two has not materialized. In a video segment on CNBC, the asset manager has said that both companies are on track to bring excellent shareholder value over the next five years, with the stock doubling its price. According to Gabelli, Time Warner Inc (NYSE:TWX), which currently trades at around $72 per share, will be worth $130 per share, while Twenty-First Century Fox Inc (NASDAQ:FOX) stock will jump to $65, from the current price of $33-a-share, in the next five years.
“I think the investors will do quite well owning both,” said Gabelli.
GAMCO Investors, the value hedge fund Gabelli founded in 1986, owns 11 million shares of Twenty-First Century Fox and 2.5 million shares in Time Warner Inc (NYSE:TWX). The dollar value of Twenty-First Century Fox Inc (NASDAQ:FOX) stake is $363 million, which is almost double compared to the Time Warner Inc (NYSE:TWX) stake of $177 million.
Gabelli indicated that he is more bullish on Twenty-First Century Fox Inc (NASDAQ:FOX), which may have brighter prospects.
Twenty-First Century Fox Inc (NASDAQ:FOX) has put forward and then removed a proposal to buy Time Warner Inc (NYSE:TWX) for $80 billion, following the target board’s refusal to discuss the deal. Gabelli has said that he is “neutral” on the acquisition, indicating, however, that a raise of the bid to $100 per share would have been too much. If it were to happen, the deal could have brought additional value to shareholders through synergies, suggested Gabelli.
“[...] The vision of the future is simple. [...] The rising middle-class in India and China, and you go anywhere in the world and you see, they go with the smartphones, the mobility, they want content, and having both [companies] put together with the right synergies,” could have made the merger work, said Gabelli.