Time Warner has confirmed that it has turned down a bid from rival entertainment business 21st Century Fox, saying it is not in the "best interests" of the company's shareholders.
Shares in Time Warner jumped 13 per cent at pixel time on the news that Rupert Murdoch's company made a multi-billion dollar offer to buy the US media giant.
According to the New York Times, the offer was rebuffed last month, citing unnamed sources, but confirmed later in a statement by the entertainment company.
Murdoch is still said to be pursuing a mega-merger with Time Warner, the owner of Warner Bros film studio and premium TV channel HBO.
He is said to have made a formal proposal in which he offered to sell off Time Warner’s cable news network CNN, a competitor to its own Fox News, to overcome any regulatory hurdles.
A potential merger would create a combined company with revenue of $65bn, the NYT reports.
Details of the rumored proposal include that it would pay 60 per cent of the price in stock, 40 per cent in cash in a bid that amounted to around 25 per cent premium to Time Warner’s stock price.
At $85 per share the offer amounts to 12.6 times Time Warner’s EBITDA.
Time Warner is said to have rejected the bid on the basis that the stock offer would be made up of non-voting shares.
According to the report, around 70 per cent of shareholders in Time Warner also own shares in 21st Century Fox.
Goldman Sachs is advising 21st Century Fox along with Centerview Partners, and Citigroup advising Time Warner on the potential deal.
Update: 21st Century Fox confirmed in a statement that it had made an offer to buy Time Warner, which was declined and that it was "not currently in any discussions with Time Warner."
The story has been updated to reflect the statement.