Even after 21st Century Fox withdrew its $80-billion bid for Time Warner, Wall Street wondered whether Rupert Murdoch was just playing possum, only to spring back to make another run at his rival.
Murdoch, and his chief deputy, on Wednesday tried to bury such concerns.
"We walked away — this is our resolute decision," Murdoch, Fox's chief executive, said during a conference call to discuss the media giant's earnings.
Chief Operating Officer Chase Carey was more forceful: "Let me be clear: We are done."
Fox's failed Time Warner takeover bid puts Fox back in familiar territory, trying to reassure investors it was not on the prowl to make any other pricey acquisitions that would hurt the share price.
"This isn't a case where we move on to another target," Carey said.
Investors have long been wary of Murdoch's penchant for pursuing trophy properties to add to his empire. They haven't forgotten how Murdoch overpaid to buy Wall Street Journal publisher Dow Jones & Co. in 2007. The acquisition resulted in a nearly $3-billion write-down that left shareholders unhappy.
For years, there was an overhang on the company's stock because everyone wondered what Murdoch would buy next.
But the mogul had exercised restraint since the British phone-hacking scandal in 2011 cast a shadow over his company. His team had been focused on streamlining and building the company's core businesses. Last year, newspapers were spun off into a separate company.
Shares of 21st Century Fox have more than doubled since mid-2011.
But last month's confirmation that Fox was making a run at Time Warner sent shares plunging. Fox then quickly moved to raise cash by selling its stake in two European pay-TV systems, a deal that is expected to generate more than $7 billion for its war chest.
So, on Wednesday, analysts peppered Fox executives about why the company wanted to buy Time Warner in the first place. Did Fox feel that it needed to be bigger to counterbalance pay-TV distributors? There are already two mega-deals in the works: Comcast Corp. is trying to buy Time Warner Cable and AT&T is closing in on DirecTV.
No, Carey said. "We don't need more scale."
Instead, Murdoch and Carey said the deal represented a "unique opportunity" because of Time Warner's premium assets. The two companies were also something of a "mirror" image of each other, Carey said.
Time Warner boasts HBO, CNN, TNT, Cartoon Network and Warner Bros., Hollywood's largest television and movie studio. Fox owns the industry's other leading film and television studio: 20th Century Fox. The company also owns a fleet of cable channels, including Fox News, Fox Sports, regional sports networks, FX, FXX, Fox Broadcasting and interests in British Sky Broadcasting pay-TV service and National Geographic Channels.
"While we remain opportunistic and nimble, we are a strategically complete company and have a clear sense of where we are going," Murdoch told analysts. Wednesday marked the first time in at least two years that Murdoch participated in an earnings call.
Fox surpassed Wall Street estimates for the April-June quarter. The company earned $999 million in profit, or 45 cents a share, contrasted with a loss of $371 million, or 16 cents a share, in the year-ago period. Revenue increased 17% to $8.42 billion.
Shares of the company, which slumped 11% in the weeks since the takeover offer became public, climbed 3.3% to $32.33 during regular trading. Helping boost the upswing was the company's announcement Tuesday that it would buy back an additional $6 billion of its stock.
However, the shares have ground to make up to reach their pre-Time Warner-bid levels of around $35.
Time Warner sank 12.9% to $74.24 after Fox withdrew its offer of $85 a share. The stock was trading around $71 before Fox disclosed its pursuit of the company July 16.
Earlier Wednesday, Time Warner Chief Executive Jeffrey Bewkes told analysts during a separate earnings call that his company was big enough to remain independent.
Bewkes, a survivor of the disastrous union between AOL and Time Warner, made it clear that he was not a fan of mega-mergers just for the sake of scale. He didn't directly address Fox's hostile bid.
Instead, Bewkes said media companies — and Wall Street analysts — should weigh many factors when considering big deals.
"We're not lacking something we need," Bewkes told analysts. "We're the biggest movie producer and distributor in the world…. We've got very strong networks.
"If you take a big combination, there are always a number of issues, there are benefits and risks," Bewkes said. He cited regulatory scrutiny and "business interruption" as factors to consider in approaching potential deals.
Time Warner's independent streak comes with risks.
"The pressure is now on management to sell investors on the 'plan' that gave the company so much confidence to ignore Fox's interest in acquiring them," said Michael Nathanson, media analyst with MoffettNathanson Research.
The company's second-quarter earnings were strong, and appeared to reinforce Bewkes' position that Time Warner was on pace to grow its businesses. He also has maintained that Fox's $80-billion offer might have undervalued the company.
Thanks to a strong second quarter from its Turner Broadcasting and HBO units, Time Warner had profit of $850 million, or 95 cents a share, up from $771 million, or 81 cents a share, a year earlier. Revenue for the quarter was $6.8 billion, a 3% increase.
"When faced with a hostile takeover bid, Time Warner did exactly what they should have done. They crushed numbers," Nathanson said.
Bewkes said the results are "evidence that our strategy is working."
At Turner, parent of TNT, TBS, TruTV, Cartoon Network and CNN, revenue was up 5% to $2.8 billion thanks primarily to increased subscription fees from pay-TV distributors. Despite the growth, there are ratings challenges at many of the networks, and Bewkes acknowledged that some of the channels need reinvigorating.
Revenue at HBO jumped 17% to $1.4 billion in large part because of sales of its programming to Amazon Prime Instant Video.