Will Twenty-First Century Fox Inc (FOX)’s Bid for Time Warner Inc (TWX) Again?

Twenty-First Century Fox Inc (NASDAQ:FOX) CEO Rupert Murdoch announced in a statement yesterday that Fox withdrew its offer to buy Time Warner Inc (NYSE:TWX) for $80 billion. Instead, Fox has launched a $6 billion buyback of its own stock. Ed Mullane, Sector Editor at Merger market group discussed this development on CNBC.

Twenty-First Century Fox Inc (NASDAQ:FOX)

“[...] With the changes occurring in the US media market, with the evolution of Netflix Inc. (NASDAQ:NFLX), the shift on people deciding when they want to watch their television shows and possible changes in advertising over the next few years, he [Rupert Murdoch] feels there’s a sense to be bigger and he needs to do something important. So I anticipate that he’ll sort of let things die down for a little while”, said Ed Mullane regarding Twenty-First Century Fox Inc (NASDAQ:FOX)’s decision to withdraw its bid.

When questioned about the likelihood of more such deals to follow between other media players such as The Walt Disney Company (NYSE:DIS), Mullane commented:

“There will be two levels in deals – the mega deals and there will be deals of the smaller players [...] The question with the smaller independent type companies is ‘can they develop the quality of program where they can demand the pricing to support the economics of maintaining an independent company?’ [...].”

Twenty-First Century Fox Inc (NASDAQ:FOX)’s bid to buy Time Warner Inc (NYSE:TWX) for $80 billion earlier had made Wall Street anxious. Time Warner’s board too did not seem very keen on this unsolicited offer and started taking steps towards rejecting the bid. Had the takeover gone through, Rupert Murdoch of 21st Century Fox would be controlling over 40 % of the cable market and 30 % of the movie market? The concentration of such a vast media pool under a single authority is not a desirable scenario from the perspective of the US media landscape and it was in the best interests of the country’s millions of media consumers that the deal was withdrawn.

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