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Fox's Time Warner Play Could Add Fuel to Consolidation Hearing

Look for Twenty-First Century Fox's confirmation that it made an offer to buy Time Warner Inc. to add some fuel to today's Senate hearing on the state of the video programming marketplace and consolidation.

Both 21st Century Fox and Time Warner confirmed that the former had made a play for the latter. Time Warner's board rejected the bid, but it represents one of the concerns expressed on the Hill about the proposed mergers of Comcast with Time Warner Cable (a separate company) and AT&T/DirecTV, which are both the subject of the hearing in the Senate Communications Subcommittee.

That concern is that merging of distributors will force programmers to heavy up in what consolidation critics suggest would be an un-virtuous cycle.

In explaining why it did not accept the offer, which has been pegged at about $80 billion, Time Warner cited the "regulatory risks to executing a combination" as one of the factors.

But Wells Fargo analyst Marci Ryvicker suggests TW's initial rejection may not be the end of the story, though both sides say there are no current discussions.

"Based on recent history (a.k.a. Time Warner Cable), we would say No [it isn't over]. What we know right now is that there are no current talks between Fox and Time Warner. But we wouldn't be surprised should Fox come in with a different offer (either in price or in structure - or both). Or perhaps other companies start to view Time Warner as a potential take-over target.