Twenty-First Century Fox Inc (FOXA) to Up the Bid for Time Warner Inc. (TWX) Through Their Sky Proceeds

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Time Warner Inc. (NYSE:TWX) has attracted many media giants over the past decade. The main attraction that company posses is the original premium content that it possess under HBO. The worth of this company keeps soaring up day by day.

Earlier this month, Twenty–First Century Fox Inc (NASDAQ:FOXA) had submitted their bid to takeover Time Warner. The bid submitted at that time was $80 billion. However, it was rejected by Time Warner’s board. In spite of their first bid being rejected, Twenty –First Century Fox Inc (NASDAQ:FOXA) still shows their intent to take over Time Warner Inc. (NYSE:TWX). Bloomberg’s Rosalind Chin and Angie Lau discussed on Fox’s next moves in Bloomberg TV.

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Chin reported that Fox wanted to sell Sky Italia and Sky Deutschland to BSkyB and is currently in talks over these deals. She also said that they could use this money to bolster the Time Warner bid amount. Fox completely owns Sky Italia and owns 57% of Sky Deutschland. Both these assets are valued at around $13.5 billion. She said that Fox and BSkyB could shake hands over the deal in couple of weeks.

Twenty-First Century Fox (NASDAQ:FOXA) has a 39% stake at BSkyB. Quite some time back, Fox was interested in taking control of BSkyB, but in the recent turn of events with this Italian and German TV assets deal, they are actually diluting that intent.

Chin said that Rupert Murdoch, CEO of Fox, tried a couple of times to get bigger stakes in BSkyB, the most recent one being in 2011. However, Murdoch had to abandon that bid due to a phone hacking scandal with one of UK’s newspapers. She said:

“So going back to what might happen now, Fox might sell its 39% stake in BSkyB.”

She also said that this could yield them $9.6 billion and help them increase the cash portion of the Time Warner bid.

Selling the stakes in BSkyB would leave Fox with cable, broadcast networks, movies and TV studios. Selling the distribution side of the business and focusing primarily on production side would actually make Fox’s business attractive to investors.

Chin also said that Fox has not made any more bid with higher price, but she feels that they are not going to give up on it easily.

 

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