Two potential mega-mergers collapse as Rupert Murdoch's 21st Century Fox abandons its $80bn plan to buy Time Warner and Sprint surprises with a decision to drop its pursuit of T-Mobile U.S. Even so, the recent wave of deal-making could go on unabated. Hayley Platt reports.
Halfway through the week and there have already been two failed bids for major companies. The first, Rupert Murdoch's 21st Century Fox's bid to buy Time Warner. The second, U.S. telecoms firm Sprint's interest in acquiring Deutsche Telekom's, T-Mobile U.S. Both have now backed away, for now at least. So does this signal the end of the M&A deals that we've been seeing lately? Philippe Gijsels, Fortis Bank. Philippe Gijsels, Chief Strategy Officer, Fortis Bank, saying (English): "I think it's a little bit too early to conclude because there is still so much money around that deals will be done. Of course when markets go in correction mode, appetites will slow, but everyone is so cash rich the hedgefunds, the investors, the corporates, so they want to put that money to work." Fox had offered $80 billion to buy the U.S. entertainment giant Time Warner. It would have created the world's largest media conglomerate. Murdoch blames Time Warner's board for refusing to come to the negotiating table. His decision to pull out of the deal has surprised investors. Although some believe it's a Murdoch tactic to drive down Time Warner's stock price, paving the way for a later bid. And it might be working. Time Warner's shares fell more than 10 percent after the close of US trading. Whilst Fox shares rose the same amount. Philippe Gijsels, Chief Strategy Officer, Fortis Bank, saying (English): "Mr Murdoch said he's going to buy back his own shares, so the money always has to flow somewhere and that's probably the main reason to be still cautiously optimistic about markets." Just hours later Sprint announced it had given up on its bid to buy T-Mobile U.S. This time it was regulatory resistance. That deal would have taken four players to three. But U.S. regulators insisting they want to keep the number of major wireless carriers as it is. It could add momentum for French telecom group Iliad to revise down its bid. It's offered to buy 57% of T-Mobile U.S. And is seen as having lower regulatory hurdles than Sprint. Deutsche Telekom shares fell by 5 percent to a 16-week low after the news.