The development was first reported by the New York Times. In a statement released Wednesday, 21st Century Fox said it had made an $85 per share offer a few weeks ago that was rejected by the Time Warner board.
The two companies first met in June when Chase Carey, the president of 21st Century Fox, meeting Time Warner CEO Jeff Bewkes personally, after which Fox sent a formal proposal. The company indicated that it would pay 60 percent in stock and the balance 40 percent in cash, saying that it would have to raise $24 billion to fund the takeover.
The deal potentially fell through over Fox's proposed use of nonvoting stock for the deal. Time Warner has no controlling shareholder, whereas Fox is controlled by the Murdoch family and has two kinds of stock -- voting and non-voting.
The merger of the two companies could have potentially created a media behemoth unrivaled by any other company. The merged company would have owned channels like Fox, Fox News, FX, TNT and TBS, subscription-driven HBO and movie studios 20th Century Fox and Warner Bros. Fox has a growing sports business that would have grown with the addition of Time Warner's professional and college basketball and Major League Baseball rights.
The combined company would have a total revenue of $65 billion and would have saved $1.5 billion in cost savings through the elimination of overlapping back office, human resources, sales and information technology operations.
The Fox proposal also included a possible sell off of CNN, owned by Time Warner. CNN and Fox-owned Fox News are direct competitors and would have triggered potential antitrust concerns. Had CNN been put up for sale there would have been no dearth of suitors, as ABC and CBS have been interested in the channel for a while.
The offer comes at a time when Comcast and Time Warner are in the center of regulatory procedures relating to their own $45 billion merger.