21st Century Fox withdraws bid for Time Warner

NEW YORK - Twenty-First Century Fox (FOX) is ending its blockbuster bid to buy Time Warner (TWX).

The about-face announced Tuesday comes three weeks after Time Warner revealed that it had rejected 21st Century Fox's unsolicited $76 billion buyout offer, which would have combined two of the world's biggest media companies.

21st Century Fox CEO Rupert Murdoch defended what he described in a statement as a "friendly" takeover offer, saying that the deal had strategic merit and was financially sound. "However, Time Warner management and its board refused to engage with us to explore an offer which was highly compelling," he said. "Additionally, the reaction in our share price since our proposal was made undervalues our stock and makes the transaction unattractive to Fox shareholders."

In touting its offer for Time Warner, Fox had estimated that the merged company could generate $1 billion in savings.

Murdoch also cited a decline in his New York company's stock price as one of the reasons for ending the pursuit of Time Warner. Moving to shore up its stock price, which is down from a 52-week high of $36.43, 21st Century Fox on Tuesday also said it would repurchase $6 billion in stock over the next 12 months.

In after-hours trading, Time Warner shares fell nearly 11 percent, to $85.19, while 21st Century Fox's stock price rose 8.6 percent to $31.30.

Although Fox is walking away, Time Warner may still be in play, with analysts saying that other large media and technology players could have an interest in what is one of the industry's largest content providers.

Under CEO Jeff Bewkes, Time Warner has sold underperforming assets such as AOL (AOL) and Time (TIME) magazine, which was recently spun-off. Investors have applauded the restructuring, sending the shares up more than 20 percent this year.