Rupert Murdoch gave up on an $80 billion bid for Time Warner, just three weeks after news broke that his 21st Century Fox group had proposed it. Time Warner rejected Murdoch’s advances and shored up its defenses to thwart any hostile attempt by the media tycoon to appeal directly to shareholders. One factor behind Murdoch’s rare defeat was the relative performance of the share prices since the bid was made public: Time Warner’s had soared, while 21st Century Fox’s had fallen.
Sprint abandoned its effort to buy T-Mobile US amid stiff resistance from regulators to combining America’s third- and fourth-largest mobile-telecoms operators. Sprint is owned by Softbank of Japan. Its billionaire boss, Masayoshi Son, had hoped a merger would provide a much-needed spurt of growth for Sprint.
Telefónica of Spain offered to buy GVT, a Brazilian telecoms firm, for $9 billion. GVT’s owner, Vivendi, a French conglomerate, scrapped a sale of its subsidiary last year. Telefónica already controls Vivo, GVT’s bigger rival in Brazil.
Gannett became the latest media company to spin off its publishing arm, which includes USA Today among its newspaper titles, from its TV and digital operations.
Hewlett-Packard raised the stakes in its dispute with the former management of Autonomy by directly accusing Mike Lynch, Autonomy’s former boss, and Sushovan Hussain, its former chief financial officer, of fraud. HP bought Autonomy in 2011, but wrote down the value of the British software company by $8.8 billion a year later. Responding to the accusation of fraud, a spokesman for Lynch and Hussain described HP’s claims as “breathless ranting.”
Walgreens decided to stay put in America. The pharmacy chain had been considering relocating to lower-taxed Switzerland after taking full control of Alliance Boots (which owns Boots chemists in Britain), but decided that it was not in the long-term interests of shareholders. Acquiring the 55 percent of Alliance Boots it did not already own will cost Walgreens around $15 billion.
In the week that Bank of America was preparing to pay fines in excess of $16 billion for mis-selling mortgage-backed securities, its shareholders received some good news when the Fed said it had no objections to the bank’s revised capital plan. This allows BofA to increase its dividend for the first time since the financial crisis.
Regulators at America’s Federal Reserve and Federal Deposit Insurance Corporation sharply criticized the “living wills” submitted by 11 big banks in which they explain how they would unwind their businesses if they go bust. The FDIC described the plans as “not credible.” The banks will resubmit their ideas; if the regulators are still unhappy, they could impose fines or force a sale of parts of a bank.
Banco Espírito Santo was rescued by the Portuguese government. The $6.6 billion bailout came with stringent conditions that left the bank’s shareholders and junior bondholders bearing the losses from its exposure to debt in its parent companies.