(Adds comment from Fox press release, analyst comment)
By Liana B. Baker and Leila Abboud
NEWYORK/LONDON, July 25 Rupert Murdoch's
Twenty-First Century Fox Inc said on Friday it would
only consider deals that are "disciplined" and increase
shareholder value, a move analysts said signalled the media
company does not want to overpay for takeover target Time Warner
Fox is expected to use the $7.2 billion proceeds from its
partial exit from Europe's pay TV market to fuel its pursuit of
Time Warner, which recently rejected Fox's initial $80
billion bid. Some investors expect it to return with a higher
Fox announced the sale of its Sky Italian and German pay-TV
units to BSkyB in cash and assets on Friday.
Murdoch said in a statement about the Sky deal that Fox's
"number one priority is increasing shareholder value in a
disciplined manner" and "we will only consider transactions that
fully support this objective."
Fox is signalling to investors it will not go beyond its
financial means to buy Time Warner, said Bernstein research
analyst Todd Juenger.
"Fox and Time Warner are now both engaged in posturing. Fox
is trying to reassure investors that it will not overpay,"
Fox did not signal it would use the proceeds for a major
deal. It said in a statement that the Sky transaction improves
the liquidity on its balance sheet and will support its key
principles including "the consistent return of capital to
Fox also pledged on Friday to keep up its new share buyback
program "regardless of any potential acquisition or investment
activity by the company." It will unveil its new share buyback
program on Aug. 6 when it reports its quarterly results.
(Reporting by Liana B. Baker in New York and Leila Abboud in
Paris; Additional reporting by Kate Holton; Editing by David
Holmes and Paul Simao)