News that 21st Century Fox had targeted the company with an $80 billion takeover offer sent shares of Time Warner surging on Wednesday morning, perhaps reflecting optimism that Rupert Murdoch’s empire will ultimately purchase a controlling interest in the rival media giant — or that it was at least being undervalued on the market.
Also read: Fox Confirms $80 Billion Bid for Time Warner Was Rejected
On Tuesday, Time Warner shares closed at $71.01; on Wednesday morning, the stock shot up to $82.25 in pre-market trading. By 9:40 am EST, the stock hit $83.11, making for a 17.08 percent increase on the previous closing price.
Fox’s bid, submitted in late June, was worth $85 per Time Warner share, a 25 percent inflation on the value of the company’s stock at the time. It was to be paid in 60 percent stock and 40 percent cash.
Time Warner recently split from the far less profitable print company Time Inc., taking its TV and film portfolio independent and making it a more attractive takeover target.