There goes an $80bn bear hug. Full statement from the 21st Century Fox chairman and chief executive:
We viewed a combination with Time Warner as a unique opportunity to bring together two great companies, each with celebrated content and brands. Our proposal had significant strategic merit and compelling financial rationale and our approach had always been friendly. 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. These factors, coupled with our commitment to be both disciplined in our approach to the combination and focused on delivering value for the Fox shareholders, has led us to withdraw our offer. Read more
Step one, inherit.
Keith Rupert Murdoch, second of four children, was born in Melbourne, Australia on March 11, 1931. In 1953, after graduating from Worcester college, Oxford, he assumed control of News Ltd — left to him by his father. Adelaide News was the main asset, and he took control of the Sunday Times in Perth, developing the sensationalist style now seen in many Murdoch papers.
Step two, start hunting with ruthless and patience persistence.
The following is an updated version of a timeline the FT published back in 2007, and we’ll also put a helpful list of News Corp’s biggest deals at the bottom. Read more
Statement here, and it is more than boilerplate.
The Board is confident that continuing to execute its strategic plan will create significantly more value for the Company and its stockholders and is superior to any proposal that Twenty-First Century Fox is in a position to offer.
Superior to a 25 per cent premium? Also note the reference to the Murdoch factor — control of the group by the closely-held voting shares of Fox (our emphasis): Read more
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.
Statement here. It may be worth revisiting the implacable tactics used by Rupert Murdoch in the pursuit of his last big trophy, as described by that prize: Read more
Warner would fit the scope of Murdoch’s ambition. It operates one of the most consistently profitable movie and TV studios in Hollywood, owns a vast film library worth more than $500 million, and has one of the largest record companies in the U.S. A battle for Warner would show off Murdoch’s defiantly competitive ways. His instincts are brute and he hardly ever bolts from a row. In late January, for instance, he had reporters at the New York Post searching for dirt about Steve Ross of Warner.
July 16 2014, NYT: Read more
An $80bn scoop on Dealbook…
Fox first approached Time Warner in early June, these people said. Chase Carey, the president of Fox and a longtime top lieutenant to Mr. Murdoch, met privately with Time Warner’s chief executive, Jeff Bewkes, these people said. Later that month, Fox delivered a formal takeover proposal worth $85 in stock and cash for each Time Warner share. Read more
It’s a question that has plagued bloggers since – well, since the industry began its hitherto short life. Some manage to sell much more advertising than others but the Truly Big Moment comes when a big entity walks in and puts a pile of cash on the table.
Such is the case with Sunday’s deal by AOL to buy The Huffington Post, known affectionately or otherwise as “HuffPo” – labelled by the blogosphere, within minutes of the late Sunday night announcement, as one of the most bemusing though lucrative (for the seller) deals in blog industry history. Read more
AOL on Tuesday announced the acquisition of Techcrunch, a tech news blog for an undisclosed amount, the FT reports. The deal for the outspoken blog, which the NYT reports is worth about $25m, highlights AOL’s push to rebuild its strategy around online content. Also on Tuesday, AOL said it had acquired 5min Media, a web video syndication company and Thing Labs Inc, a software maker. Meanwhile, reports the Telegraph, Jeff Bewkes, chairman and CEO of Time Warner, said on Tuesday that Time Warner’s merger with AOL was “the biggest mistake in corporate history” but had helped the company focus on its strengths.
Time Warner will bid $1.5bn (£993m) in what is expected to be an all-cash offer for the assets of Metro-Goldwyn-Mayer, owner of the James Bond film franchise. The owner of CNN and Time Inc magazine group controls Hollywood’s largest film library and is seen as placed to generate strong returns from MGM’s assets through its distribution network and relationships with pay TV companies.
First-round bids for troubled Hollywood studio MGM were a little better than expected but did not come close to covering the $3.7bn owed to lenders, reports the WSJ. Bids ranged between $1.5bn and $2.5bn, and MGM is exploring a prepackaged” bankruptcy as part of the auction. In all, MGM received interest from more than 10 suitors, some who bid and others who expressed interest, including Time Warner; Lions Gate; Summit; Liberty Media; News Corp; and India’s Reliance ADA Group, as well as some private-investment firms.
Jerry Levin, who sold Time Warner for AOL shares inflated by the dotcom boom, has marked the 10th anniversary of the disastrous $164bn deal by urging corporate titans to accept responsibility for the recent financial crisis. The former Time Warner chief executive, who up to now had avoided apologising for the billions of dollars destroyed by the deal, on Monday made a mea culpa in an appearance on CNBC, urging business leaders to follow his example. See also FT Alphaville, “Dogeza US style“.
Here’s a trend we’d like to encourage…
Ten years after consummating what is generally regarded as the worst merger in corporate history, former Time Warner AOL chief executive Jerry Levin has apologised. Read more
In case you missed these stories:
Wall Street ends decade in the red
Wall Street ended the decade in the red after encouraging jobs data on Thursday renewed concerns over interest rate rises.
Media conglomerate Time Warner said on Monday it will spin off its AOL unit to shareholders on Dec 9, nine tumultuous years after one of the most disastrous corporate mergers in history, reports Reuters. Time Warner shareholders of record on Nov 27 will receive an AOL stock dividend for every 11 shares of Time Warner common stock they hold, a ratio that would effectively value AOL’s market cap at around $3.44bn. At its peak, the company was valued at $240bn.
(Corrected to fix headline)
Markit’s Gavan Nolan wrote this CDS report
European credit indices recovered losses from yesterday’s correction amid signs that the major economies are continuing to improve. The Markit iTraxx Europe index was trading around 87bp, about 3.5bp tighter than yesterday’s close. The Markit iTraxx Crossover index was 17bp tighter at 524bp, while the Markit iTraxx HiVol index was trading around 142bp, 7bp tighter on the day. Read more
The prolonged global advertising drought hurt Time Warner in the second quarter as steep double-digit declines in online and magazine publishing sales sent the media group’s net profit down 8% to $519m. Revenue fell 9% to $6.8bn. But the one-time largest media company, now pruning its portfolio to focus on TV, movies and print content, appeared better positioned than some rivals. Viacom this week reported losing a third of its profits in the last quarter, while News Corp expects to report a significant loss in operating profit for its fiscal year ending June.
This CDS report was written by Markit’s Gavan Nolan
European credit markets struggled for the second consecutive session, paying little heed to rallying stick markets. The Markit iTraxx Europe index was trading around 94.7bp, about 0.5bp tighter than yesterday’s close. The Markit iTraxx Crossover index was the worst performer, widening 7bp to 656bp, while the Markit iTraxx HiVol index again dislocated from its underlying constituents and tightened by 4bp. Read more
Time Warner will spin off the entire AOL internet business by year-end, the US media group said on Thursday, bringing the curtain down on one of the biggest and worst deals in history. AOL’s all-share acquisition in 2001 valued Time Warner at $164bn but was followed by a series of huge write-downs, including a $100bn charge in 2002. Steve Case, former AOL chief executive and an architect of the deal, using the Twitter messaging service on Thursday welcomed the separation.
Time Warner is close to a decision to spin off all of its AOL internet business. Although not yet final, executives are known to favour spinning off the whole division rather than a part of it. Over the past year, Time Warner has considered spinning off either its advertising-driven “audience business” or its legacy dial-up internet business. Time Warner’s board of directors are expected to approve a decision to start the process on Thursday.
This CDS report was written by Markit’s Gavan Nolan
European credit indices gave back some of their gains this afternoon following disturbing news from the US. This morning saw a continuation of the recent rally, with the Markit iTraxx Europe index more than 12bp tighter at one point. But the strong performance could not be sustained after US stock markets opened down and European stock indices followed suit. The ADP employment survey showed that the US private sector shed 693,000 jobs in December, far higher than expected. However, the methodology of the report was changed this month and it is difficult to tell whether this has had a meaningful effect on its reliability. Technical issues aside, the size of the figure bodes ill for the crucial non-farm payrolls report this Friday. Read more
News Corp is in “serious talks” with Microsoft over a joint bid for Yahoo, reports the WSJ, although the NYT says the talks are at a “sensitive stage”. Meanwhile, Yahoo and Time Warner’s AOL are nearing a deal to combine their internet operations, a move that could thwart Microsoft’s effort to acquire Yahoo, the Journal added. The possible Yahoo-AOL tie-up is part of Yahoo’s threefold plan to present shareholders with an alternative to Microsoft’s unsolicited offer. Yahoo would also propose repurchasing billions of dollars of its own shares and is negotiating with Google about an advertising tie-up. On Wednesday, Yahoo announced a short-term test to carry Google search advertising, reports the FT. The NYT says the alignment of Microsoft and News Corp could allow Microsoft to raise its bid, intensifying pressure on Yahoo and its shareholders and leaving them one less alternative to escape Microsoft’s grasp.
Time Warner is separating AOL’s dial-up internet access service from its faster-growing online advertising business. The move could presage a sale or further realignment of both businesses in response to Microsoft’s $42.2bn offer for Yahoo. Jeff Bewkes, Time Warner’s chief executive, said the split was one of Time Warner’s “top priorities”. Announcing the company’s Q4 earnings, Bewkes also said he hoped to resolve the future of Time Warner Cable, its largest source of revenues, by mid-April, although his intentions remained unclear. Time Warner has repeatedly expressed a desire to spin off or separate its 84% stake in the business, but analysts believed it could also take advantage of cable’s low valuations to consolidate its control. Time Warner’s Q4 earnings fell 41% to $1bn compared with the previous year, when it benefited from the sale of AOL’s European internet access business. Excluding one-off items, profits rose 17%, led by strong performances from its cable and film studios.
Time Warner ousted Chris Albrecht, HBO chairman and chief executive, yesterday following his arrest for allegedly assaulting his girlfriend in a Las Vegas parking lot on Sunday. Bill Nelson, HBO chief operating officer, had already stepped in as a temporary replacement after Mr Albrecht went on a paid leave of absence on Tuesday. The company said it was looking for a permanent replacement. Mr Albrecht, a former stand-up comedian, was arrested outside the MGM Hotel following a championship boxing match between Oscar De La Hoya and Floyd Mayweather.
When new shares of Time Warner Cable could begin trading remains unclear. Mr Parsons stressed that Time Warner was still working on a second route to listing the cable business, through a traditional IPO. The company would not comment on timing, but a listing by one of these routes is expected in the next three months.