New York - Twenty-First Century Fox Inc. is willing to pay more than $85 a share for Time Warner Inc., according to people with knowledge of the matter, a sign Rupert Murdoch is undeterred after being rebuffed in an initial offer for the media company.

Fox calculates the combined company could achieve more than $1 billion in cost savings, including through the elimination of overlapping back office, human resources, sales and information technology operations, said one of the people, who asked not to be identified because the information is private. Fox estimates that figure could go higher once it's able to conduct due diligence on Time Warner, the person said.

Fox's willingness to raise its offer is contingent on Time Warner engaging in talks again, according to the person, who said Murdoch hasn't been directly involved in discussions. A deal would reshape the media industry by giving the TV-and-film companies bargaining power in negotiations with cable operators such as Comcast and Time Warner Cable, which are in the process of their own merger.

By making a higher offer, which would exceed $75 billion, Fox would seek to pull in Time Warner assets such as the TNT and TBS cable networks and premium channel HBO to add to its own stable of media properties, including the Fox movie studio, broadcast network and 24-hour news channel.

While TBS is alluring to Fox, HBO is seen as a major attraction and is being valued at $20 billion, according to one of those with knowledge of the matter. Fox views Time Warner's revenue growth potential in HBO and international properties, the person said.

The proposal Time Warner rejected included 1.531 Fox shares and $32.42 in cash, Time Warner said Wednesday in a statement. The transaction would be risky for regulatory and operational reasons, and Time Warner's assets will increase in value if the company continues on its own, it said.

To appease antitrust regulators, the companies would sell CNN, according to a psource, since Fox already has Fox News. CNN could fetch about $6 billion in a sale, the person said.