* Bid worth about $80 billion -sources
* Murdoch may consider higher offer for Time Warner -sources
* Time Warner shares up 17.3 percent
(Changes throughout with sourcing, company background)
By Soyoung Kim and Liana B. Baker
NEW YORK, July 16 Rupert Murdoch's 21st Century
Fox Inc said on Wednesday it had offered to buy Time
Warner Inc, a move that would unite two of the world's
most powerful media conglomerates, but Time Warner rebuffed its
Time Warner's stock jumped 17.3 percent to $83.33 on the New
York Stock Exchange after news that Murdoch had his sights on
Time Warner, the owner of the Warner Bros. movie studio and
cable channels such as HBO and CNN, among other media
Murdoch's cash-and-stock bid was worth about $80 billion, or
$85 per share, people familiar with the matter told Reuters
earlier on Wednesday. The offer, first reported by The New York
Times, consisted of 60 percent in stock and the rest in cash.
Twenty-First Century Fox later confirmed it had made a
formal takeover proposal in June but said there were no talks
currently under way.
Even so, Murdoch and his advisers are unlikely to abandon
his ambition to put Time Warner in his empire so easily, one of
the people said, pointing out that he has the "disciplined
determination" to get a deal done.
Fox's overtures to Time Warner could accelerate a wave of
consolidation that is already reshaping the U.S. media
Reuters reported this month that Murdoch was in the midst of
a deal that would give Fox the firepower to buy a content
Fox, which owns cable news channel Fox News as well as movie
studio 20th Century Fox, has indicated it would sell CNN as part
of its proposal to buy Time Warner to clear any regulatory
hurdles, according to the people familiar with the matter.
"(It) would be good deal for Fox if it goes through
Washington (regulators) with CNN sales," Wunderlich Securities
analyst Matthew Harrigan told Reuters in an email. He said the
"fair public value" for Time Warner was $82 a share.
Fox currently estimates that a combined company would save
$1 billion in costs and possibly more, primarily by cutting
sales staff and back-office functions, the people familiar with
the matter said.
It believes that detailed negotiations with Time Warner
could reveal much higher synergies than $1 billion, which may
justify Fox sweetening its offer, the people said.
The combined company's revenue would be more than $60
Twenty-First Century Fox is in the middle of a
reorganization of its television business as the network seeks
to lift itself out of last place among the big U.S.
The shakeup of Rupert Murdoch's Twenty-First Century Fox's
TV units comes a year after the film and TV company was spun off
from Murdoch's News Corp, which now operates publishing
assets, including the Wall Street Journal.
Twenty-First Century Fox is being advised by Goldman Sachs
and Centerview Partners, while Time Warner is working
(Reporting by Soyoung Kim and Liana Baker; Editing by Saumyadeb
Chakrabarty and Lisa Von Ahn)