Fox’s US$80 billion bid for Time Warner could “prompt other offers, even from technology giants”, Moody’s suggested.
The fact Time Warner publicly acknowledged the Fox offer “puts the company in play”, according to Moody’s senior VP Neil Begley.
Commentators have suggested buying Time Warner could ultimately cost around US$90 million.
Moody’s Begley said: “While a deal is still uncertain, Time Warner management could make a strong case for a higher valuation or independence, pointing to intermediate-term earnings growth opportunities.”
Should a tech company acquire Time Warner, “digital innovators could gain access to content and drive more rapid change in the digital and mobile worlds”, Moody’s sais.
This comes as Time Warner took another step to distance itself from hostile takeover attempts, which have been mooted since the company rejected Rupert Murdoch’s offer out of hand.
Time Warner has amended a bylaw that allowed shareholders to call a special board meeting and push through a sale against management’s wishes.
Sources have told the Wall Street Journal this is to give shareholders more time toevaluate a merger, and to see how both Time Warner and Fox perform against targets in coming months.
The bylaw will be reinstated in time for next year’s annual meeting, the firm has said.