In a surprise development, 21st Century Fox has pulled out of its proposed acquisition of Time Warner.

Chairman and CEO Rupert Murdoch said in a statement that his recent, rejected $80bn bid had been “friendly”, adding that he wanted to focus on delivering value for shareholders.

News of the withdrawal pushed Fox shares up by 8% after market trading and saw Time Warner stock drop 11.9%.

Murdoch had been expected to press for acquisition during an earnings call on Wednesday (6), but now that speculation has been consigned to history.

“We viewed a combination with Time Warner as a unique opportunity to bring together two great companies, each with celebrated content and brands,” Murdoch said in a statement.

“Our proposal had significant strategic merit and compelling financial rationale and our approach had always been friendly. However, Time Warner management and its board refused to engage with us to explore an offer which was highly compelling.

“Additionally, the reaction in our share price since our proposal was made undervalues our stock and makes the transaction unattractive to Fox shareholders. These factors, coupled with our commitment to be both disciplined in our approach to the combination and focused on delivering value for the Fox shareholders, has led us to withdraw our offer.

“21st Century Fox’s future has never been brighter. The strength of our leading franchises, combined with the power of our emerging growth businesses and the leadership positions of our international enterprises put us on a path for even greater success.”

The Fox board on Tuesday authorised a $6bn share repurchase programme, which is expected to be completed in the next 12 months.

“This significant return of capital underscores the company’s ongoing commitment to disciplined capital allocation and returning value to shareholders in a meaningful way,” said Murdoch.