EXCLUSIVE: 21st Century Fox Rekindles Bid For Time Warner At $105/Share; Company Denies M&A

Twenty-First Century Fox Inc FOXA is still interested in Time Warner Inc TWX. A source familiar with the matter told Benzinga on Friday morning that Fox has made a new offer for Time Warner, this time at a price of $105 per share.

The source said the deal could happen as soon as next week. Time Warner shares closed Thursday's session at $70.20; The stock has been volatile on Friday amid a report from the New York Post that Time Warner shareholders could force a sale or spinoff HBO.

Gabelli & Co. analyst Brett Harriss told Benzinga Friday morning that this elevated price makes prospects of a takeover "seem unlikely."

Two other Wall Street analysts, who both asked to remain anonymous, told Benzinga this takeover makes sense.

UPDATE: A Twenty-First Century Fox spokesperson told Benzinga, "The report is categorically untrue."

Benzinga has reached out to Time Warner and is awaiting a response.

Previous Offer

Fox had previously shown interested in Time Warner back in the summer of 2014. At that time, Fox bid $85 per share for the media company. The potential deal was called off in August of that year.

Media mogul and Fox CEO Rupert Murdoch at the time said, "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."

Murdoch cited Fox's share price, saying it had become undervalued, making the deal "unattractive to Fox shareholders."

Previous Comments

Back in November 2015, Harriss wrote in a note that Fox "could return to re-bid" for Time Warner. Among other reasons, the firm said "Fox Warner" could eclipse Walt Disney Co DIS as the dominant U.S. media company.

"We expect traditional operating synergies would be material in a combination," the firm wrote. "Fox estimated $1 billion of operating synergies as part of its 2014 offer which we expect to be conservative." Additionally, the combined sports right of the two companies would challenge ESPN, according to the firm.

Gabelli also said a combined entity would scale greatly on the international front, and that both would be better positioning to build a wholly-owned over-the-top (OTT) product.

Also last November, Morgan Stanley cited the rising U.S. dollar and the "fraying of the pay-TV bundle that rives the majority of Time Warner's economics" as two emerging headwinds for Time Warner.

Nick Donato, Jake Mann and Jason Shubnell contributed to this report.

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