Rupert Murdoch's 21st Century Fox said it made a bid to buy media conglomerate Time Warner Inc but was rebuffed.
The bid was worth roughly US$80 billion, or $85 per share in cash and stock, a source familiar with the situation told Reuters.
Time Warner's stock jumped 22.5% to $87 premarket as the New York Times reported that Murdoch was determined to buy Time Warner and was unlikely to walk away despite the rejection.
Twenty-First Century Fox confirmed that it had made the formal proposal to Time Warner last month.
"The Time Warner Board of Directors declined to pursue our proposal. We are not currently in any discussions with Time Warner," Twenty-First Century Fox said in a statement on Wednesday.
Time Warner was not immediately available for comment.
Reuters reported this month that Rupert Murdoch is in the midst of a deal that would give Fox the firepower to buy a content company.
Fox first approached Time Warner, owner of the Warner Bros. movie studio and cable channels such as HBO and CNN, in early June and delivered a formal takeover proposal later that month, the Times reported, citing people familiar with the matter.
Fox, which owns movie studio 20th Century Fox and cable news channel Fox News, offered to sell CNN as part of its proposal to buy Time Warner to clear any regulatory hurdles, the Times said.
"I think fair public value is $82. (It) would be good deal for Fox if it goes through Washington (regulators) with CNN sales," Wunderlich Securities analyst Matthew Harrigan told Reuters in an email.
Time Warner's board discussed the proposal at length and sent a terse letter rejecting the offer earlier this month, saying that it was better off remaining independent, the newspaper said.
It said the deal fell through because the stock portion of Fox's offer consisted of non-voting shares.
Fox had estimated that a combined company would save $1 billion in costs and possibly more, primarily by cutting sales staff and back-office functions, the paper said.
The combined company's revenue would be over $60 billion.
Twenty-First Century Fox is in the middle of a reorganization of its television business as the network seeks to lift itself out of last place among the big U.S. broadcasters.
The shakeup of Rupert Murdoch's Twenty-First Century Fox's TV units also comes a year after the film and TV company was spun off from Murdoch's News Corp, which now operates publishing assets, including the Wall Street Journal.
Twenty-First Century Fox is being advised by Goldman Sachs and Centerview Partners, while Time Warner has hired Citigroup and other advisers, the paper said.