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21st Century Fox abandons pursuit of Time Warner Inc.

NEW YORK -- Rupert Murdoch's 21st Century Fox is abandoning its attempt to take over Time Warner in a proposed deal that would have combined two of the world's biggest media companies.

The about-face announced Tuesday comes three weeks after Time Warner Inc. revealed that it had rejected 21st Century Fox's unsolicited US$76 billion buyout offer.

Murdoch, a voracious dealmaker throughout his colorful career, had envisioned creating a movie-and-television powerhouse by devouring Time Warner. Twenty First Century Fox owns the 20th Century Fox movie studio, Fox broadcast network, and cable-TV channels Fox News and FX while Time Warner's stable includes the Warner Bros. movie studio and TV channels such as TNT, TBS and HBO.

There had been hopes on Wall Street that Murdoch wanted Time Warner so badly that he would raise 21st Century Fox's original cash-and-stock offer bid of roughly US$86 per share to as much as US$100 per share to win over Time Warner.

Some analysts had expected Murdoch to continue stalking Time Warner, reasoning that the billionaire viewed a takeover as an opportunity to gain 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 Inc. is trying to gobble up satellite TV service DirecTV.

But 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.

Time Warner had made it clear that it intended to staunchly resist Murdoch's overtures.

In a Tuesday statement, Time Warner sought to reassure its shareholders. “We look forward to continuing to deliver substantial and sustainable returns,” the New York company said.

In his own statement, Murdoch said his New York company's “future has never been brighter.”

With the proposed Time Warner deal off the table, 21st Century Fox's board approved a plan to spend US$6 billion on buying back stock.

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