Twenty-First Century Fox's (FOXA) Rupert Murdoch is determined to buy Time Warner Inc (TWX) after the media conglomerate rejected an $80 billion buyout offer from Twenty-First Century Fox Inc, the New York Times reported. Twenty-First Century Fox, controlled by Murdoch, offered last month to buy Time Warner for $85 per share in cash and stock, the newspaper reported.

Time Warner's stock jumped more than 20% percent in the premarket session to $85.57 or up +$14.56 a share.

I recently purchased Time Warner for my clients, the day after the company split off its Time Inc. (TIME) division.  Time Warner is just one of many content providers I have been buying for my clients as "Content is King" right now. Here are the key players (that may also be put into play soon) and the amazing free cash flow numbers they are putting up. Here is my company's research on all the key players.

TIME WARNER (TWX)

VIACOM INC (VIAB)

DISCOVERY COMMUNICATIONS (DISCA)

SCRIPPS NETWORKS INTERACTIVE (SNI)

Mr. Murdoch has no choice but to make this offer as his company is the weakest player, from a free cash flow point of view, and he can boost his free cash flow numbers substantially by buying Time Warner. He has basically put the industry in play as I was hoping that either Comcast (CMCSA) or Disney (DIS) would, but now that it is play, I believe that the list above will eventually be bought out or merged into Comcast, Disney or Twenty-First Century Fox as all three would benefit substantially, as my company's research shows below.

DISNEY (DIS)

COMCAST (CMCSA)

In conclusion, in a historically low interest rate environment and a greatly overvalued stock market, as David Stockman clearly pointed out  in this article today, this I believe is one of the last places that an investor can enjoy the benefits of a major merger and acquisition (M&A) environment that has just been put in play by Mr. Murdoch. Acquiring companies are using their overvalued share prices as collateral to get loans (Deja Vu 1999) and are trying to acquire as many firms as they can before the window closes and the market has a serious correction. I base my work on free cash flow , FROIC (Free Cash Flow Return on Invested Capital) and CapFlow (Capital Expenditures/Cash Flow). Except for Comcast (which I also own for my clients), Disney and Twenty-First Century Fox are in dire need of an improvement of their free cash flow numbers and that is why I have believed for some time now, that a major M&A environment would hit the industry sooner than later. I thank Mr. Murdoch for unleashing it today with his offer for Time Warner. As you can see from my research on Time Warner above that Mr. Murdoch is going to have to go much higher in his offer for Time Warner if he wants this jewel, as it is just a free cash flow monster as "Content is King" right now.  This market is sure starting to get that 1999 look and I would love nothing more than to have all the key players that I own to be bought out, so I can go more to cash. It's also scary that AOL's merger with Time Warner some 15 years ago was a major catalyst in the crash that soon followed. Will history repeat itself ?