Time Warner Inc (NYSE:TWX) does have a tough time ahead after rejecting the acquisition offer from Twenty-First Century Fox Inc (NASDAQ:FOXA). With only a few days left in the analyst and investor meet, the management has some serious thinking to do before facing the shareholders.
It may not seem impossible as The Walt Disney Company (NYSE:DIS) did something similar a decade ago while defending a hostile acquisition from Comcast Corporation (NASDAQ:CMCSA) and the company did succeed in convincing its audience. In fact, the shares of The Walt Disney Company (NYSE:DIS) have grown as much as 250% until now and the management of Time Warner might have to do something similar.
David Miller, Topeka Capital Markets, said, “Disney pleaded the case to get its share price up on their own. We think that Mr. Bewkes will attempt to drive home the same concept.” He further added that Time Warner CEO, Jeff Bewkes, would have to repeat Disney’s performance.
Earlier, Twenty-First Century Fox Inc (NASDAQ:FOXA) placed a bid of $85 per share against Time Warner’s $73, during that period, share price and as per some experts, the company was ready to increase its bid to $95. The shares of Time Warner Inc (NYSE:TWX) have dropped in excess of 5% after the bid.
According to Brett Harriss, Gabelli & Co., “It’s too simple to say that Bewkes has to get the stock price over $85. He has to tell us why he said no to Fox. Time Warner has said nothing – only that at no price would it combine with Fox.” Experts are expecting a long-term strategy from the CEO for all three primary businesses, HBO, Warner Bros movie studio and Turner broadcasting network, and the situation is quite similar to what Bewkes faced four years ago.
There are several points under consideration including cutting the staff of Turner or letting customers buy HBO without cable subscription. Under any circumstances, there is a lot that one could expect from the meeting next week.
This article has been written by Prakash Pandey and edited by Serkan Unal.