Rupert Murdoch's Twenty-First Century Fox made an audacious offer for Time Warner that if it succeeds would transform the American media landscape and cement the 83-year-old's status as the most powerful magnate in US media and entertainment.

While Time Warner, whose assets include the HBO cable channel and the Warner Bros movie studio, rejected the $80 billion bid, Murdoch is unlikely to abandon the pursuit and has the "disciplined determination" to get the deal done, people close to the situation said. Investors expect he will eventually raise the offer and increase the cash component - 40 percent - to win the prize.

Murdoch's proposal, fresh on the heels of his high-profile divorce and a damaging phone-hacking scandal that involved his British tabloids, is aggressively bold even for a media mogul whose ambitions are legendary.

A combined Fox-Time Warner would have a massive array of media and sports content and be in a very powerful negotiating position with cable and satellite distributors - some of whom have themselves announced mega-deals and newer ways of getting to consumers, such as online video distributors Netflix and Amazon.com.

"It's a chance to put some great programming and content assets under one umbrella," a person close to the situation said. "There are other alternatives, but none of them fit anywhere near as well as this does."

Still, Time Warner pushed back strongly against Murdoch's approach, insisting the offer undervalued the media conglomerate and raising fears about the dominating role that his family would play, another person close to the situation said on Wednesday.

In particular, the board is worried about the future value of Fox's shares, which represented 60 percent of its cash-and-stock proposal. Those fears were magnified by a lack of voting rights, the source said, as that would concentrate too much power in the hands of Murdoch and his sons.

"To do a merger of this scale and size where Time Warner shareholders have no insight into the destiny of the company is very troubling," the source, who was not authorized to speak on the record, told Reuters.

Time Warner chief executive officer Jeffrey Bewkes told the conglomerate's employees in a videotaped appearance that the company's standalone strategic plan would create value "superior to any proposal" that Fox could offer.

The acquisition, if ever completed, would mark the second-largest media deal ever, when debt is included, trailing only the disasterous takeover of Time Warner by AOL in 2000.

In the end, a Time Warner deal is likely to hinge on price. The source pointed out that Fox's stock has traded at the highest multiple of its peer group and Time Warner - prior to its 17 percent rally on Wednesday - was trading at the lowest. Time Warner worries that the stock - the main "currency" of the deal - may be ripe for a pullback, lowering the value that is currently on the table. - Reuters