Time Warner Changes Bylaws to Guard Against Fox Acquisition

Rupert Murdoch Time Warner Bid Media
Scott Olson/Getty Images

Time Warner is strengthening its defenses in preparation for Rupert Murdoch’s next play.

The media company’s board approved a measure Monday to temporarily prevent a fraction of shareholders, some 15%, from forcing a vote on 21st Century Fox’s $85 per-share offer, according to public filings. The so-called special meeting provision may be re-instated at the company’s 2015 shareholders meeting.

“They want to keep tighter control of the flow of the process so they are not overwhelmed if something happens that they don’t like,” said Hal Vogel, CEO of Vogel Capital Management.

Time Warner’s management believes the move will prevent a hostile takeover, while allowing it more time to make its case that it has a plan to unlock more shareholder value and grow as an independent company, according to an insider. It may also raise questions about Fox’s history of hitting its earnings projections.

Unlike Fox or Viacom, Time Warner is not controlled by a family, leaving it more vulnerable to takeover attempts.

Last Wednesday, Time Warner confirmed it saw Fox’s initial bid as too low. Many analysts believe that Murdoch will return with a higher figure, though that is not expected to happen this week.  Fox is mulling selling Sky Italia and its holdings in Sky Deutschland, which could be used to bolster the cash portion of another Time Warner bid.

Analysts have positioned Murdoch’s interest as part of a coming wave of media consolidation. Companies in the content business are under pricing pressure from cable providers and digital distributors, so they must band together to improve their leverage in negotiations, the thinking goes.

Spokesmen for Time Warner and Fox declined comment.

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  1. Julian says:

    What about Netflix + TimeWarner?

    Netflix needs locked-in content, HBO could become a $7.99 add-on to Netflix, Netflix and TimeWarner don’t disrupt each other’s businesses, but they do move away from cable…

    Just a little outside the box thinking…

  2. GKN says:

    Oh yes Times Warner, please do stop it by any possible means! VERY disappointed to read on and see it’s all only about money though. I had hoped it was an ethical issue since Murdoch should have been put in prison years ago for all his lies and propaganda which have ruined the lives of so many and gotten so many killed in wars, waged solely for the further profit of his gazillionaire buddies. Silly me. ‘Course we would have to restore those laws requiring a minimum of ethics to begin with, and cease worshipping the Almighty dollar only first – already only worth half what it was before they all got the economy by the throat.Even stockholders used to have more brains in previous generations…

  3. occultology says:

    This is a direct result of Disney’s purchase (poaching) of ‘Star Wars’ — the greatest film franchise/money generating/babysitter of all time. 20th Century Fox was wounded terribly by this debacle, but it won’t admit it. Because of this, the cunning Fox, now rabid and foaming at the mouth, will stalk and finally consume poor Warner Brothers in a desperate and maniacal ‘Survival of the Film-Fittest’ corporate growth conquest strategy. It will be fun to see how this all plays out, and which others studios will partner-up together in this Oligarch’s Orgy.

  4. Ideation20 says:

    To FOX, 21st Century, 20th Century or CenturyCity, WB shares are worth north of $110, if you do a Fox + WB work up it is very clear that unless Fox ponies up another $30-$40, like another 42% it’s better for WB to unlock that value…..for example selling CNN &HLN to CBS/Viacom is worth a princes ransom in Subscriber value forecasts. And I wouldn’t touch Fox shares unless Rupert was in the hospital, no offence intended.

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