Rupert Murdoch $80B Takeover Bid for Time Warner Inc. Rejected
Rupert Murdoch's $80 billion takeover bid for Time Warner Inc. has been rejected, but will the media mogul walk away from the deal?
Rupert Murdoch’s media powerhouse, 21st Century Fox, recently made an $80 billion takeover bid for Time Warner Inc., however the deal has been rebuffed.
On Wednesday, Time Warner confirmed that it had rejected a cash and stock offer from 21st Century Fox, its reason being that it was not in the company’s best interests. Instead Time Warner said in a statement that its own strategic plan would “create significantly more value” for the company.
Time Warner also cited “uncertainty” over the value of non-voting shares of 21st Century Fox. Time Warner currently has no controlling shareholder, while the Murdoch family, which has 39.4 percent of the voting rights of the Class B shares, controls 21st Century Fox.
Time Warner revealed that 21st Century Fox had offered 1.531 of its Class A non-voting common shares and $32.42 in cash for every Time Warner share - or a total of nearly $86.30 - a premium of roughly 22 percent to Time Warner’s closing price on Tuesday.
Are the Tables Turning?
Time Warner’s bold rejection of Murdoch’s bid could give it the upper hand and may even result in a reshaping of the media industry. Andrew Ross Sorkin, founder of Deal Book went as far to say that Time Warner’s approach could prompt “a new spate of mega-mergers among the nation’s largest entertainment companies.”
Had the deal gone ahead, together 21st Century Fox and Time Warner would have become a bit of a behemoth in the media world, owning a wide array of television networks and channels such as Fox, Fox News, FX, TNT and TBS. They would also own premium subscription channel HBO and movie studios 20th Century Fox, Warner Bros. and other mainstream outlets. It would also combine Fox’s growing sports business with the broadcast rights that Time Warner owns for professional and college basketball and Major League Baseball, among other sports.
The combined company would have total revenue of $65 billion.
Will Murdoch Walk Away?
It would be wise to remember, that Murdoch has built his media empire, in part, by pursuing bold deals that were often rebuffed at first by targets that would later acquiesce.
According to reports, 21st Century Fox first approached Time Warner in early June. During an initial meeting 21st Century Fox said that it would raise $24 billion to help pay for the deal and stressed that its bid was not dependent on financing.
The company estimated that a combination would create $1 billion in cost savings and possibly more, primarily by cutting sales staff and back-office functions. In its letter, sent on June 24, 21st Century Fox insisted that it planned to keep Time Warner’s most successful managers and creative executives as well as its various channels and studios.
It is thought that Time Warner’s board discussed the proposal at length, however, on July 8 sent a letter rejecting the offer, saying the company was better off remaining independent.
It is unclear what 21st Century Fox’s next steps will be. With the disclosure of the takeover approach, pressure from Time Warner shareholders could mount on CEO, Jeff Bewkes to begin talks. About 70 percent of Time Warner shareholders, including many big mutual funds, also own shares in 21st Century Fox.
While the talks between the two companies have thus far been considered friendly, people involved in the discussions say that Murdoch is determined to buy Time Warner and is unlikely to walk away.
Marketing matters: from IBM to Kyndryl
Prior to joining Kyndryl as Chief Marketing Officer, Maria had a 25-year career at IBM, most recently as the tech giant’s CMO where she oversaw all marketing professionals and activities across North America, Canada and Latin America. She has held senior global marketing positions in a variety of disciplines and business units across IBM, most notably strategic initiatives in Smarter Cities and Watson Customer Engagement, as well as leading teams in services, business analytics, and mobile and industry solutions. She is known for her work with teams to leverage data, analytics and cloud technologies to build deeper engagements with customers and partners.
With a passion for marketing, business and people, and a recognized expert in data-driven marketing and brand engagement, Maria talks to Business Chief about her new role, her leadership style and what success means to her.
You've recently moved from IBM to Kyndryl, joining as CMO. Tell us about this exciting new role?
I’m Chief Marketing Officer for Kyndryl, the independent company that will be created following the separation from IBM of its Managed Infrastructure Services business, expected to occur by the end of 2021. My role is to plan, develop, and execute Kyndryl's marketing and advertising initiatives. This includes building a company culture and brand identity on which we base our marketing and advertising strategy.
We have an amazing opportunity ahead at Kyndryl to create a company brand that will stand apart in the market by leading with our people first. Once we are an independent company, each Kyndryl employee will advance the vital systems that power human progress. Our people are devoted, restless, empathetic, and anticipatory – key qualities needed as we build on existing customer relationships and cultivate new ones. Our people are at the heart of this business and I am deeply hopeful and excited for our future.
What experiences have helped prepare you for this new opportunity?
I’ve had a very rich and diverse career history at IBM that has lasted 25+ years. I started out in sales but landed explored opportunities at IBM in different roles, business units, geographies, and functions. Marketing and business are my passions and I landed on Marketing because it allowed me to utilize both my left and right brain, bringing together art and science. In college, I was no tonly a business major, but an art major. I love marketing because I can leverage my extensive knowledge of business, while also being able to think openly and creatively.
The opportunities I was given during my time at IBM and my natural curiosity have led me to the path I’m on now and there’s no better next career step than a once-in-a-lifetime-opportunity to help launch a company. The core of my role at Kyndryl is to create a culture centered on our people and growing up in my career at IBM has allowed me to see first-hand how to prioritize people and ensure they are at the heart of progress in everything Kyndryl will do.
How would you describe your leadership style?
I believe that people aren't your greatest assets, they are your only assets. My platform and background for leadership has always been grounded in authenticity to who I am and centered on diversity and inclusion. I immigrated to the US from Chile when I was 10 years old and so I know the power and beauty that comes from leaning into what makes you different from other people, and that's what I want every person in my marketing organization to feel – the value in bringing their most authentic self to work every day. The way our employees feel when they show up for themselves authentically is how they will also show up for our customers, and strong relationships drive growth.
I think this is especially true in light of a world forever changed by the pandemic. Living through such an unprecedented time has reinforced that we are all humans. We can't lead or care for one another without empathy and I think leaders everywhere have been reminded of this.
What’s the best leadership advice you’ve received?
When I was growing up as an immigrant in North Carolina, I often wanted to be just like everyone else. But my mother always told me: Be unique, be memorable – you have an authentic view and experience of the world that no one else will ever have, so don't try to be anyone else but you.
What does success look like to you?
I think the concept of success is multi-faceted. From a career perspective, being in a job where you're respected and appreciated, and where you can see how your contributions are providing value by motivating your teams to be better – that's success! From a personal perspective, there is no greater accomplishment than investing in the next generation. I love mentoring younger professionals – they are the future. I want my legacy as a leader to include providing value in work culture, but also in leaving a personal impact on the lives of professionals who will carry the workforce forward. Finding a position in life with a job and company that offers me a chance at all of that is what success looks like to me.
What advice would you give to your younger self just starting out in the industry?
I've always been a naturally curious person and it's easy for me to over-commit to projects that pique my interest. I've learned over years of practice how to manage that, so to my younger self I’d say… prioritize the things that are most important, and then become amazing at those things.