Sun | Mar 18, 2018

After failed Time Warner bid ... Fox: No more pursuit of content companies

Published:Friday | August 8, 2014 | 12:00 AM
Rupert Murdoch, executive chairman of News Corporation. - FILE


Twenty-First Century Fox Inc executives said on Wednesday that the company won't try to buy any other big content companies, a day after it called off its pursuit of rival media giant Time Warner Inc.

Fox Chief Operating Officer Chase Carey said on a conference call with analysts that "we have no plans to pursue any other third-party content company as an alternative to Time Warner".

Upon being questioned whether all small acquisitions were out of the question, CEO Rupert Murdoch responded, "If there was something very unique but small, I don't know, I wouldn't say never. But we have no plans to go out on the acquisition trail."

The owner of Fox News Channel and the 20th Century Fox movie studio ended its US$76-billion bid for Time Warner Inc after the New York company behind HBO and the Warner Bros movie studio rejected its offer. Fox's stock had dropped, making a cash-and-stock deal more difficult. Instead, Fox offered US$6 billion in share buybacks over the next 12 months.

Both the Time Warner and Fox CEOs said that the companies were big enough already. Fox executives said that Time Warner had represented a unique opportunity.

As for Time Warner: "We're not lacking something that we need," CEO Jeff Bewkes told analysts on an earlier conference call on Wednesday.

Revenue up

Fox reported better-than-expected fourth-quarter earnings. The New York-based company's net income in the three months to June 30 came to US$999 million, or 45 cents per share, compared with a loss of US$371 million, or 16 cents per share, in the same quarter a year ago.

Excluding one-time events, adjusted earnings came to 42 cents per share, beating the 38 cents expected by analysts polled by FactSet.

Revenue rose 17 per cent to US$8.42 billion, also above the US$7.99 billion expected by analysts.

Many analysts had expected Murdoch to continue stalking Time Warner after the initial cold shoulder, reasoning the billionaire viewed a takeover as a prime opportunity to create a movie and television powerhouse that would be in a better bargaining position to sell its video content at a time when video distributors are muscling up too. Comcast Corp, the largest cable and high-speed Internet provider, is trying to win approval to buy rival Time Warner Cable, while AT&T Corp is trying to gobble up satellite TV service DirecTV.

As in the case with those proposed deals, 21st Century Fox would have had to navigate potentially daunting antitrust hurdles to buy Time Warner. Cultural clashes also loomed had the two companies combined, a factor that turned Time Warner's merger with AOL Inc in 2001 into a monumental flop. Time Warner and AOL eventually split, but not before costing their shareholders tens of billions of dollars.