WHEN: Today, Wednesday, July 16th
WHERE: CNBC's "Squawk Box" live from CNBC Institutional Investor Delivering Alpha Conference
Following is the unofficial transcript of breaking news from CNBC's Andrew Ross Sorkin during CNBC's "Squawk Box" live from the CNBC Institutional Investor Delivering Alpha Conference in New York City today. Following is a link to the video on CNBC.com: http://video.cnbc.com/gallery/?video=3000293043.
All references must be sourced to CNBC.
ANDREW ROSS SORKIN: WELCOME BACK TO "SQUAWK BOX" THIS MORNING, WE ARE COMING TO YOU NEW YORK CITY. WE HAVE AN EXCLUSIVE DEAL NEWS FOR YOU THIS MORNING. TIME WARNER, NOT TIME WARNER CABLE, TIME WARNER HAS INITIALLY REJECTED THE $80 BILLION FORMAL OFFER THAT THEY RECEIVED LAST MONTH. FROM 21st CENTURY FOX, RUPERT MURDOCH'S COMPANY. THIS HAS BEEN GOING ON THE PAST MONTH. WHAT WE CAN TELL YOU IS TIME WARNER RECEIVED AN OFFER LAST MONTH FROM RUPERT MURDOCH'S 21st CENTURY FOX FOR $80 BILLION AND HAS NOW FORMALLY REJECTED THAT OFFER. A COUPLE THINGS TO TELL YOU ABOUT WHAT'S GOING ON. THE OFFER FOR $85 A SHARE IN CASH AND STOCK. THAT'S WHAT THE SOURCES ARE TELLING ME. WE CAN ALSO TELL YOU THAT AS PART OF THIS, A FORMAL LETTER WENT OUT WITH THE OFFER IF LATE JUNE AS PART OF THAT AND SAID AT 21st CENTURY FOX TO GET THE DEAL THROUGH WOULD SELL CNN TO APPEASE REGULATORS, GIVEN THEY OWN FOX NEWS.
JOE KERNEN: THEN RUPERT WOULD NOT BE THE BOSS OF CNN?
SORKIN: RUPERT WOULD NOT BE THE BOSS OF CNN. 21st CENTURY FOX MET WITH JEFF BEWKES IF EARLY JUNE. THEY HAD SOME CONVERSATIONS. THEN 21st CENTURY FOX APPROACHED WITH THIS NEW OFFER AT THE END OF THE MONTH AND RECEIVED A TERSE LETTER IN JULY. ALL OF THIS PUTTING TIME WARNER IN PLAY. THERE HAS BEEN A LOT OF SPECULATION THAT TIME WARNER WOULD REMAIN AN INDEPENDENT COMPANY. DESPITE THE REJECTION, I AM TOLD BY PEOPLE FAMILIAR WITH THE MATTER THAT RUPERT MURDOCH IS DETERMINED TO BUY THE COMPANY REPEATEDLY PUSHING TO DO IT. A COUPLE THINGS SPECIFIC TO THE TRANSACTION, ITSELF, $85 A SHARE IN CASH AND STOCK, CURRENTLY, GIVEN THE WAY THE STOCK HAS TRADED, THAT DEAL WORTH 8630. AT THE TIME THE DEAL WAS PROPOSED, IT WAS WORTH ABOUT A 25% PREMIUM. A 60% IN STOCK. 40% IN CASH T. COMPANY WOULD RAISE ABOUT $24 BILLION IN FINANCING TO PAY FOR THE TRANSACTION. IN ITS LETTER TO TIME WARNER, I AM TOLD THAT FOX SELD THEY COULD RING AT LEAST A BILLION DOLLARS OF SYNERGYS FROM THE COMPANY, IF NOT MORE. ALSO, ONE POTENTIAL STICKING POINT AND I HAVE BEEN TOLD THAT THIS COULD BE AN ISSUE. THE STOCK THAT FOX IS OFFERING NON-VOTING STOCK, TIME WARNER, OF COURSE, NOT CONTROLLED BY ANY PARTICULAR FAMILY OR MAJORITY HOLDER FOX IS ACCEPTING IF THEY ACCEPT A DEAL LIKE THIS NON-VOTING STOCK T. SHAREHOLDERS, VERY SIMILAR. 70% OF TIME WARNER'S SHAREHOLDER BASE OVERLAPS WITH FOX'S SO YOU WILL BE SEEING POTENTIALLY EVEN JUST THE DISCLOSURE OF THE FACT THAT THEY'RE TALKING ABOUT THIS, YOU COULD SEE PRESSURE.
BECKY QUICK: ANDREW, I WANT TO POINT OUT ONE THING, WHILE YOU HAVE BEEN TALKING, THE STOCK HAS BEEN REACTING TO IT. IT WAS TRADING WELL BELOW $72, CAN YOU SEE RIGHT NOW, IT'S ALREADY UP 14% ON THAT NEWS, BUT WHAT YOU HAVE SAID THAT WAS KEY IS RUPERT MURDOCH IS DETERMINED TO OWN THIS COMPANY. SO ITATIVE SO THEY'VE SHUT IT DOWN.
ANDREW ROSS SORKIN: TO BE CLEAR I AM NOT TOLD HE IS PLANNING TO LAUNCH A PROXY FIGHT JUST YET. I AM NOT TOLD THERE IS ANYTHING MORE TO. THIS WHETHER HE WILL RAISE HIS BID, WITH EDEN KNOW. I AM TOLD THEY DID GET THIS LETTER IN LATE JUNE.THAT'S THE BOARD OF TIME WARNER. THEY DISCUSSED IT. THEN THEY REJECTED IT. WHAT I AM TOLD IS LITERALLY A SEVERAL SENTENCE LETTER BACK SAYING NO THANK YOU. WE SHOULD ALSO TELL YOU JUST LAST WEEK JEFF BEWKES THE CEO OF TIME WARNER WAS ASKED ABOUT SPECULATION HE COULD ONE DAY MERGE WITH ACTUALLY GOOGLE OR IN THIS CASE 21st CENTURY FOX. HIS RESPONSE, I KNOW NOTHING ABOUT IT. WHAT'S THE HE TOLD "VARIETY" MAGAZINE. WHEN YOU THINK OF THE COMBINATION OF THESE TWO COMPANIES, IT'S REMARKABLE THE COCOLOSSAS. FOX NEWS THE CABLE CHANNEL, TNT, PREMIUM CABLE SERVICE AT HBO, WHICH IS VERY ATTRACTIVE TO FOX.ALL THE MOVIE STUDIOS.
JOE KERNEN: WHAT WOULD THEY MAKE THEM SELL, YOU THINK? YOUR FATHER IS AN ANTI—TRUST LAWYER. EVERYTHING GOES?
ANDREW ROSS SORKIN: I DON'T KNOW. WHAT I AM TOLD IS IN THE LETTER THE BOARD MEMBERS THAT TIME WARNER RECEIVED, THEY SAID THEY WANTED TO KEEP ALL THE BRANDS, ALL OF THE CREATIVE PEOPLE AND THE TALENTED MANAGERS. THEY SAID ALL THE CUTS THAT THEY WERE THINKING ABOUT PURSUING IN COME OFF BACK SALES DISTRIBUTION. SO THEY'RE TRYING TO SAY WE WANT TO KEEP WARNER BROTHERS AND FOX, FOX SEARCH LIGHTS, ALL THE DIFFERENT STUDIOS AND BY THE WAY YOU THINK OF THE SPORTS.
JOE KERNEN: THE END PIECE OF THIS.IS IT WEIRD THEY SPECIFICALLY SAID WE WON'T KEEP CNN?
ANDREW ROSS SORKIN: I THINK BY PUTTING THAT UP FRONT. I AM TOLD THE BOARD MEMBERS OF TIME WARNER RECEIVED THAT LETTER AND THAT WAS RIGHT IF THAT LETTER THAT SAID UP FRONT WE WILL DIVEST AND TRY TO TELL CNN.
BECKY QUICK: DID THEY NOT HAVE A CENTRAL BUYER?
ANDREW ROSS SORKIN: ARGUABLY, CBS HAS BEEN LONG TIME RUMORED AS SOMEBODY INTERESTED IN THAT. DISNEY COULD WANT TO HAVE CNN. UNIVISION IS OUT THERE. THE DOMINOS OF THIS TYPE OF TRANSACTION COULD PUT INTO PLAY WOULD BE REMARKABLE. ONE ISSUE ON THE SPORTS, TIME WARNER THROUGH TNT, NBS. THEY HAVE THE NBA, SOME MAJOR LEAGUE BASEBALL. A BIT OF THE NCAA. FOX TRYING TO BUILD OUT FOX 1. YOU THINK COMCAST TRYING TO BUY CABLE. CONTENT MAY BE VERY POWERFUL. THE SAME THING WITH DIRECTV, AT&T. ALL OF A SUDDEN IT THROWS EVERYTHING INTO RELIEF.
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