New York (AFP) - Rupert Murdoch's conglomerate said Wednesday it made an unsuccessful bid for rival Time Warner which could shake up the media-entertainment world.
The bid by 21st Century Fox, which would merge two of the world's biggest media-entertainment empires if allowed to proceed, was for $80 billion, a source familiar with the talks told AFP.
A statement from 21st Century Fox, said it "made a formal proposal to Time Warner last month to combine the two companies."
The source said that despite the rejection, Murdoch still wants a deal.
"He is determined to buy Time Warner," the source said.
The statement from 21st Century Fox, which came after a New York Times report about the offer, said the Time Warner board of directors "declined to pursue our proposal," and added that "we are not currently in any discussions with Time Warner."
The source familiar with the talks told AFP Murdoch's group wanted to buy Time Warner and then spin off CNN, which is the cable news rival to his Fox News Channel.
Time Warner meanwhile issued a separate statement confirming that it received, and rejected, an offer of stock and cash from 21st Century Fox.
The statement said the Time Warner board "determined that it was not in the best interests of Time Warner or its stockholders to accept the proposal or to pursue any discussions" with Murdoch's firm.
"The board is confident that continuing to execute its strategic plan will create significantly more value for the company and its stockholders and is superior to any proposal that Twenty-First Century Fox is in a position to offer," the statement said.
The move comes amid a shifting media landscape after both conglomerates spun off their slow-growing publishing operations and established companies focusing on film, television and other high-growth segments.
Murdoch last year broke up his media empire into two firms -- 21st Century Fox and News Corp, which operates The Wall Street Journal, and newspapers in Britain and Australia.
Time Warner this year spun off its magazine unit Time Inc., which publishes its flagship news weekly and other titles including Sports Illustrated and People.
The deal between the two giants would combine the storied Hollywood studios of Time Warner and 20th Century Fox, and include Time Warner's big cable channels such as HBO and TBS that would join Murdoch's Fox sports, news and entertainment channels.
Some analysts said HBO is the main driver of the plan, because the premium pay-TV channel offers a way to compete against the successful streaming video firm Netflix.
"HBO is the crown jewel asset, but imagine now you have to figure how to program TBS, TNT, Cartoon, CNN, etc," said Richard Greenfield at BTIG Research. "Not to mention that a merger of that size would face integration and regulatory challenges."
James Goss at Barrington research said a takeover "would provide great complementary value" and that "Fox would be getting a solid deal if able to complete this takeover."
Analyst David Bank at RBC Capital Markets said the deal could offer some "synergies," or savings, by reducing costs and getting better access to films and television programs.
In addition, Bank said that by marrying the Time Warner television studios with the Fox broadcast network, a combined company "could own (and likely enhance) the entire value chain of the prolific and already successful Time Warner TV studio."
Time Warner shares surged 17 percent on the news to $80.13, while Fox dropped 6.2 percent to $33.00.