Boston, MA 09/19/2014 (wallstreetpr) – Time Warner Inc (NYSE:TWX) and Twenty-First Century Fox Inc (NASDAQ:FOXA) failed to tie up and there have been few details to explain it except some claims of independence from Time Warner. However, there fresh details and this time around it is FOXA giving its version of the story. Media mogul Rupert Murdoch disclosed that he backtracked on the deal because it would have involved a huge debt.
In an interview with Fox Business Network, Murdoch said he dropped pursuit of Time Warner Inc (NYSE:TWX) after he realized that the deal involved a lot in terms of financing. He said that given the uncertainties in the world, he was not comfortable carrying “that degree of debt”. FOXA placed an $80 billion buyout proposal to add Time Warner to its portfolio. That offer valued Time Warner at $85 per share and was expected to involve about $30 billion in the form of debt.
No hostile pursuit
While revealing why it was not possible to buy Time Warner Inc (NYSE:TWX), Murdoch also said that he had no plans of making another bid for Time Warner. He also ruled out possibility of a hostile pursuit.
On its part, Time Warner termed Murdoch’s offer as being too low to accept. Instead, CEO, Jeffery L. Bewkes, said they were better off as a standalone entity. He promised to take actions that would see the business grow and create value for the shareholders. Among his immediate plans is cost cutting measures. Towards that end, the company recently announced layoff plans at its various units. According to the recent announcements, 1,000 workers at the Warner Bros. Entertainment could be rendered redundant, and another 500 at Turner Broadcasting Networks would be offered buyout opportunity. The buyout offer would target workers that have been in the company for 10 years or more.
Several industry-watchers expected a deal between Time Warner Inc (NYSE:TWX) and FOXA to create a strong global media. They expected an entity that could compete effectively with the like of Google Inc (NASDAQ:GOOG), Facebook Inc (NASDAQ:FB) and others, which are increasingly eating into the advertisement dollar of traditional media.
