Dow Jones Evaluates News Corp. Bid

WSJ Newsroom 'Going Wild'

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NEW YORK ( -- Despite continued denials it is for sale, Dow Jones & Co. today was forced to consider that option when it received an unsolicited bid from Rupert Murdoch's News Corp.
Photo: AP

Rupert Murdoch has made a bid for Dow Jones today.


Bancroft Family to Reject News Corp. Offer for Dow Jones
Controls More Than 50% of Voting Power
Dow Jones, which owns The Wall Street Journal, Barron's and MarketWatch, acknowledged it was evaluating the offer of $60 a share in cash or in a combination of cash and News Corp. securities. Shares of Dow Jones surged more than 50% to more than $57 on the news of the bid, which was reported mid-morning on CNBC. Trading on the stock has been halted.

Clout for business channel
It's perhaps a bit ironic the scoop came from CNBC as News Corp. is set to launch a competitor, its own Fox business-news channel, later this year. Acquiring Dow Jones would certainly add financial-reporting clout to the company as it attempts to get the channel off the ground.

Dow Jones in a statement said: "The board of directors and members and trustees of the Bancroft family, who hold shares representing a majority of the company's voting power, are evaluating the proposal. There can be no assurance that this evaluation will lead to any transaction."

In addition to TV and film assets, News Corp. owns several major newspapers around the world, including the New York Post and The Times in the U.K. The bid comes at a time when the newspaper industry has been challenged by declining circulation and a weakened ad market.

Soaring stock prices
The offer is a very positive event, said Thomas Forsha, portfolio manager at River Road Asset Management in Louisville, Ky. "Honestly the price is very compelling," he said. "We think the combination of Fox and the Wall Street Journal properties would be a compelling long-term proposition."

Then again, Mr. Forsha noted, River Road sold all 563,405 of its shares in Dow Jones today after the announcement sent the stock price soaring.

Dow Jones' stock, which closed yesterday at $36.33, today jumped to an intraday high of $57.88. That was its highest price since April 2002, when the stock topped $60. The stock's all-time high was $77.31 in June 2000, set as the dot-com bubble was bursting.

Dow Jones earnings
Excluding special items, Dow Jones recently reported first-quarter earnings of 24 cents per diluted share, up 71.4% from the 14 cents per diluted share earned in first-quarter 2006. Revenue increased 17.9% to $507.2 million, primarily because of the acquisition of Factiva, the news-archives service, and growth at Dow Jones Online and other businesses.

There were modest declines at The Wall Street Journal, the company's flagship, which launched a redesign Jan. 2 that included trimming the page size. Yesterday The Journal, the second-largest paper in the country, after USA Today, reported average paid weekday circulation of 2.1 million, up a slight 0.61%.

"The newsroom is going wild," one WSJ insider said. "We'll see what Dow Jones has to say."

Until then, the employees' union, the Independent Association of Publishers' Employees (IAPE), local 1096 of the Newspaper Guild/Communications Workers of America, had this to say in a statement:

Staff opposition
"The staff, from top to bottom, opposes a Rupert Murdoch takeover of Dow Jones & Co. Since the early part of the twentieth century, the Bancroft family has stood up for the independence and quality of The Wall Street Journal and has built it into one of the world's great newspapers.

"Mr. Murdoch has shown a willingness to crush quality and independence, and there is no reason to think he would handle Dow Jones or The Journal any differently. Despite our differences of opinion with current management, we strongly encourage the Bancrofts to continue to stand up for the institution's independence, and to walk away from this offer.

"Moreover, the massive premium Mr. Murdoch is offering suggests only one recourse to make the acquisition profitable: gutting the enterprise and slashing the staff that make it the leading financial news organization."
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