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Murdoch defends dropping Time Warner bid

Rupert MurdochRupert Murdoch
Rupert Murdoch

What’s interesting: Rupert Murdoch defended 21st Century Fox dropping its $80 billion bid for CNN and HBO parent Time Warner on Tuesday by saying a takeover was “as a unique opportunity with clear strategic benefits.” But he said that he walked away because the potential deal was “no longer attractive.” Speaking in call with analysts for his company’s quarterly earnings, Murdoch tried to downplay the idea that his company would come back with a sweetened offer. “This is our resolute decision, which is why we formally withdrew our acquisition offer,” Murdoch told analysts before adding that “our future has never been brighter.” Time Warner rejected Fox’s takeover offer last month in a deal that would have combined two giants in the broadcast and paid television world. Further negotiations went nowhere.

Later in the call, COO Chase Carey spoke in even plainer terms. “Let me be clear, we are done,” he said on the call before adding that Fox’s decision to walk away from the deal was driven by the drop in its own share price and the highly-defensive” actions taken by Time Warner.

Meanwhile, going back to the company’s earnings release, Murdoch championed a new $6 billion share buyback program announced yesterday. The buyback is expected to be completed within the next fiscal year. “As we close the fiscal year, I continue to have confidence in our ability to execute our growth plan and drive value for our shareholders,” Murdoch said in a statement.

The numbers: 21st Century Fox posted profits of 43 cents per share in its latest quarter, topping Wall Street predictions of about 38 cents per share. The entertainment company reported profits of $999 million after posting a loss of $371 million during the same quarter last year. Fox also reported a 16.8% sales gain with revenue hitting $8.42 billion for the quarter after analysts predicted revenue of $8 billion.For the full fiscal year, the company reported $31.9 billion revenue for an increase of 15% year over year.

The takeaway: In the company’s earnings release, Murdoch boasted about the “record fourth quarter contributions” of Fox’s movie studios, which benefitted from strong box-office showings for several films during the quarter, including X-Men: Days of Future Past, Rio 2, and The Fault in Our Stars. That segment of the company performed well in the last quarter with $2.8 billion in revenue, an increase of almost 38% over the same quarter last year.