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21st Century Fox, a film and TV empire controlled by Rupert Murdoch, offered to buy Time Warner last month for about $80 billion, a deal that would combine two of the largest players in the cable network business and possibly unleash a wave of consolidation among content producers.

Time Warner said in a statement Wednesday that 21st Century offered about $84 a share, a combination of 1.531 non-voting common stock shares and $32.42 in cash. But in a video, Time Warner Chairman and CEO Jeff Bewkes said the board determined that the unsolicited bid "was not in the best interests of Time Warner." 21st Century Fox also confirmed its bid.

Shares of Time Warner soared 17.1% to end the day at $83.13 after an initial report by The New York Times that Murdoch had approached Bewkes.

If the deal had been struck, the combination would have given birth to the world's largest media company that would control — if regulators approve it, hardly a safe assumption — two huge Hollywood movie studios, local TV stations nationwide, the most watched cable news network in Fox News along with its closest rival CNN, as well as several popular cable channels in HBO, TNT and TBS.

"The Time Warner Board of Directors declined to pursue our proposal," said 21st Century in a statement. We are not currently in any discussions with Time Warner."

But rarely do deals of this magnitude fail after the first offer, and the two companies will likely continue to talk given Murdoch's heavy interest in adding more film and TV assets. Knowing Time Warner has at least one suitor, other network operators could be interested in jumping in to buy all or parts of the media giant. That there is a large overlap of shareholders – a majority of Time Warner shareholders also own shares in 21st Century Fox -- will continue to put pressure Bewkes to pursue a deal, analysts say.

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As the cost to produce and buy shows and sports games surges, TV networks are looking for mergers to boost their bargaining leverage against cable and satellite companies and sports leagues that are seeking higher payments. Fox, CBS and NBC pay the NFL about $28 billion to broadcast the league's games until 2022, and, given the growing popularity of the sport, the next contract will be significantly larger. Through its Turner division, Time Warner also has close ties to the NBA and its TNT network that broadcasts several NBA games a week.

Murdoch's interest in sizing up comes amid a flurry of mergers by pay-TV providers whose profit margins have been hampered by higher fees they pay to cable networks for content and a growing base of cord-cutting consumers seeking better value in video by streaming online.

Earlier this year, Comcast agreed to pay $45 billion to buy Time Warner Cable — a former unit of Time Warner that had been spun off as a separate company — to combine the nation's two largest cable companies. AT&T also struck a $48.5 billion deal in May to buy DirecTV. Regulators are still reviewing the deals.

"The idea of consolidation should come as no surprise," wrote Michael Nathanson, an analyst at MoffettNathanson, in its blog Wednesday. "When one side of the bargaining table gets bigger, the other side usually reacts. We just never thought that 21st Century Fox (or Disney or CBS) with their broadcast network and vast scale would feel the need to react this soon, this aggressively and this big."

Time Warner also has a coveted asset in HBO, whose original shows are beloved by critics and fans but are expensive to produce. HBO's success drove Netflix to emulate the original-series approach by paying to produce at-Netflix-only shows. Netflix CEO Reed Hastings has repeatedly said his chief competitor is HBO.

Combining resources would also theoretically generate more savings by not having to run duplicative functions. But to get regulatory approval of any deal with Time Warner — or with any other large network — 21st Century Fox will likely have to shed some assets. If the deal were to be completed, the merged company likely will sell CNN to appease regulators, according to a report by Bloomberg News. The cable news network would be valued at about $6 billion, the report said, citing a person familiar with knowledge of the matter.

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In rejecting Murdoch's offer, Time Warner's board determined that executing its strategic plan will create "significantly more value for the company" and is superior to any proposal that 21st Century Fox "is in a position to offer," Time Warner said.

The board is also betting that the value of Time Warner's portfolio of networks, film studio and television production units will continue to increase and fetch higher offers, if the company is interested in merging later with another cable network operator.

"There is significant risk and uncertainty as to the valuation of Twenty-First Century Fox's non-voting stock and Twenty-First Century Fox's ability to govern and manage a combination of the size and scale" of the combined company, Time Warner said.

Persuading regulators to approve the merger of two large cable network owners would be a difficult and tricky proposition. Time Warner acknowledged the challenge, saying "there are considerable strategic, operational and regulatory risks" to a merger with 21st Century Fox.

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