21st Century Fox says it has withdrawn attempt to acquire Time Warner

NEW YORK (CNNMoney) -- Rupert Murdoch said Tuesday that he had withdrawn his offer to acquire Time Warner, all but admitting defeat in what would have been the biggest media merger in recent history.

In a statement, Murdoch cited Time Warner's rejection of the initial bid from 21st Century Fox and "the reaction in our share price since our proposal," which "undervalues our stock and makes the transaction unattractive to Fox shareholders."

Fox shares had dropped nearly 10% since the initial bid was made public on July 16.

Fox investors had been concerned Murdoch would come back with a higher offer and overpay for his rival media giant, which includes CNN, the owner of this website.

MoffettNathanson partner Michael Nathanson, a veteran media industry analyst, called Murdoch's statement a "smart move" in an email message. Referencing the two companies' stock symbols, he said, "FOX gets stock up, pushes TWX down, makes FOX shareholders feel better."

Time Warner had no immediate comment. When Murdoch's interest in Time Warner was first reported, Time Warner CEO Jeff Bewkes said that the company's own strategic plan would prove more valuable to investors than any Fox offer.

Time Warner stock dropped about 11% in after-hours trading after the news that the bid had been withdrawn. Fox climbed about 7%.

Both companies are set to report earnings Wednesday.

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