After the trading closed on Tuesday, 21st Century Fox announced the withdrawal of its bid for Time Warner Inc. as the company bought back its stock worth $6 billion.

BBC reports that following the statement, Time Warner's stock plummeted more than 11 percent while the stock of 21st Century Fox rose by 7 percent in after-hours trading.

Negotiations between the two giant companies lasted for weeks until Rupert Murdoch, in a surprising move, withdrew his acquisition offer of $80 billion.

The entertainment company rejected the initial offer by Fox earlier in July and according to the statement made by Fox, Time Warner "refused to engage" and explore their highly compelling offer.

Fox's statement was released a day before the second quarter earnings were to be reported by the two companies. Also according to the statement, Murdoch gave way to the investors' concerns regarding the acquisition.

A close source added that the drop in the price share of Fox made it more difficult to get a stock-and-cash deal without negative implications on the shareholders' interest, at least in the short term.

Murdoch, a CEO with a daring reputation, explained that the board approved the $6 billion stock buyback instead of pursuing Time Warner. The amount will be distributed over the next year.

Sources who are familiar with the situation mentioned that Fox saw it as a "unique opportunity" to close the deal with Time Warner, considering it as an addition to its blue-chip assets.

Fox is also set to earn about $7.2 billion from transfers of European satellite television companies including Sky Deutschland and Sky Italia that will be transferred to BSkyB, a company in which Fox has a stake of 39 percent.

The move was surprising for Fox as well, with a close source saying that the decision to withdraw the offer was not a negotiating tactic but a "firm walkaway."