Twenty-First Century Fox pulls out of move for rival Time Warner

The surprise announcement appeared to cut short what many investors had viewed as an inevitable battle of attrition over a deal that would have joined two of Hollywood’s biggest studios and TV networks from TNT to Fox News.

Still, some investors wondered whether the move could be a shrewd effort to drive down the stock, prompting Murdoch to re-enter the fray later on.

“This could easily be part of their negotiating strategy,” said Brett Harriss, an analyst with Gabelli & Co, who said Fox could still try again later.

Murdoch, Fox’s chairman and CEO, cited Time Warner’s management and its board’s refusal to come to the table to discuss a takeover as one reason for the stunning turnabout. “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,” he said.

He also cited Fox’s share price – down 11 per cent since the offer on July 16 – saying it had become undervalued, making the deal “unattractive to Fox investors”.