NEW YORK (TheStreet) -- Yesterday was a bad day for investment bankers when Twenty-First Century Fox (FOXA) pulled its $80 billion buyout offer for Time Warner (TWX). This was the second major deal to be pulled off the table, with Sprint Corporation (S) withdrawing its $40 billion offer for T-Mobile almost at the same time.
It's not common for Murdoch to abandon deals so quickly. But the resolve of the Time Warner board to fight him certainly prompted the action. Time Warner moved quickly to change its bylaws to make any buyout of the company much harder. Shares of Fox have also been punished since the offer was announced, dropping 10% in a month, to $32.75 as of 1:30 p.m. Wednesday.
Coinciding with the news, Fox announced a $6 billion stock buyback.
Rupert Murdoch stated he wanted to do a friendly takeover, not a hostile one.
What is the more likely scenario is that Murdoch is playing a game of chicken with Time Warner, hoping market pressure will force the board to become more amicable to merging. All indications and expectations were that Murdoch would have paid more for Time Warner than he initially offered.
Now all attention will focus on CEO Jeff Berkes to see if he can get the stock back to the $85 to 90 range it was on news of the original deal. Time Warner's shares were down more than 12% Wednesday at 1:30 p.m., to $74.47.