Eighty-three-year-old Keith Rupert Murdoch's zeal for deals looks insatiable. His astounding $80 billion cash-n-stock offer for Time Warner, though rebuffed by the latter, has exposed his undying instinct and itching to sew up another mega deal.
"The Man Who Owns The News", as called by his biographer Michael Wolff, is hardly on the defensive, and in fact, on the prowl. The Wall Street, which is familiar with Murdoch strategies in the past that turn initial opposition to meek surrender, has blissfully pushed up Time Warner shares to a 14-year high on New York Stock Exchange.
At 9.50pm IST, its shares jumped 16% to $82.36, after touching an intra-day high of $84.40 per share.
Murdoch's three-decade-long lust for Time Warner is akin to a Hollywood thriller. He apparently offered to buy it in 1984, having been intoxicated by the idea of running a merged media giant having an unparallel clout in TV and film production in the US, and major stakes in the news, sports and entertainment fields. He couldn't. But he continued to pursue his dream.
On Wednesday, Bloomberg News reported that Murdoch is willing to go above the $85-a-share price that Time Warner turned down. No wonder, Time Warner shares spiked after the news broke.
The New York Times, which broke the news about Murdoch's plans, said that 21st Century Fox, one of the two huge media conglomerates owned by Murdoch, offered to purchase Time Warner for $80 billion, but was turned down. Murdoch's own Wall Street Journal reported that, other than CNN, which he offered to sell off to avoid regulatory backlash, Murdoch wanted to buy all of Time Warner.
Time Warner, which was sold to America Online (AOL now) at the height of the dot-com boom in a $165 billion deal in January 2001, today is the world's third largest broadcasting and cable company in terms of revenues, behind The Walt Disney Company and Comcast. The company consists of assets of the original company formed after merging Warner Communications and the publishing giant Time Inc, along with the assets of Turner Broadcasting. Time Warner has major operations in film, television, and publishing. Among its subsidiaries are HBO, Cartoon Network and CNN. AOL, Time Warner Cable, and Warner Music Group, which Time Warner previously owned, were spun off into independent companies.
Why this mega merger?
Many believe that it is in Murdoch's blood to continue to consolidate the entertainment industry. And sky is the only limit for him. Time Warner itself has been part of several of the biggest mergers of the past few decades, including the merger of Time and Warner in the 1980s.
If not Murdoch, there aren't too many who have the zeal and the financial firepower to pursue such a deadly deal.
Murdoch, who built the largest global media conglomerate over five decades comprising television channels, newspapers and related assets, is also rumoured to be keen on the Tribune newspapers, which are being spun off from their parent company.
Several people hope that these deals and the enormous excitement it generates will help Murdoch put his woes with the hacking scandal in London on the backburner. In July 2011, he faced several allegations that his companies, including the News of the World in the UK, owned by News Corporation, had been regularly hacking the phones of celebrities, royalty and public citizens. He also faced police and government investigations into bribery and corruption by the British government apart from FBI investigations in the US.
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