Hey, did you hear that it's all over? Rupert Murdoch's play for Dow Jones, that is! Seems that a couple of analysts have told their investors that because nothing has happened so far with the bid in the three weeks since it became public, News Corp. is going to take its $60-a-share offer and walk away. And, you know, if two analysts say it, it's going to happen! Everyone's repeating it, so it must be true!
Interesting note from an editorial in today's Wall Street Journal:
With little of note happening in what Times business columnist Joe Nocera referred to on Saturday as the "Mr. Murdoch Lusts After Dow Jones" story, the papers are forced to manufacture another angle from which to analyze the bid: Specifically, how will Friday's Page Six Payola revelations affect Murdoch's chances of wooing the Bancrofts? On the heels of a 1,300 word front-pager in Saturday's Times recounting the scandal—for which the paper was forced to reel back in former gossip-boy and current theater reporter Campbell Robertson—comes today's David Carr follow-exegesis. Carr believes that the decision to run the allegations in the Post itself can be traced to Post editor (and alleged stripper-sex receiver) Col Allan's unwillingness to get scooped by the News. Uberflack Howard Rubenstein also says that the Post wanted to get their spin on the story before anyone else did. Carr's column ends with a thought exercise!
We're at the epistolary stage of the Dow Jones story: Rupert Murdoch sent a letter to members of the Bancroft family offering them "a seat on News Corp.'s board and pledging to safeguard the editorial integrity of The Wall Street Journal and other Dow Jones editorial properties." The letter promoted Murdoch as a family man (well, he does have three) with a passion for newspapers. The Bancrofts—about 80 per cent of whom "rejected Mr Murdoch's $60-per-share bid two weeks ago"—seem unimpressed, although there remains a faction that wants to meet with him. The Guardian notes that Murdoch's offer to set up an independent board for the Journal mirrors a promise he made when he purchased the Times of London years ago; that board since "has long been disbanded."
Today in the "Rupert Murdoch wants Dow Jones" story that will not die: Apart from the aforementioned Wall Street Journal profile of the Bancroft family—who, you'll recall, have a controlling interest in Dow Jones—there's a Tim Arango piece in Fortune that examines how the family's lust for dividends has "starved Dow Jones of capital to grow its business. Arango suggests that Rupert Murdoch could convince Dow Jones' independent directors to reduce those dividend payouts, forcing the Bancrofts' hand.
Today in the greatest story that isn't! Dow Jones shares took a giant tumble yesterday amid speculation that Rupert Murdoch won't go any higher than his $60-a-share offer for the company. News Corp. shares, on the other hand, rose 6.2%, mainly because of profits from that movie where Ben Stiller is out-acted by a CGI Tyrannosaurus rex skeleton. The Wall Street Journal suggests that the proposed merger between Thomson and Reuters "risks putting Dow Jones Newswires at a disadvantage compared with larger rivals, in particular a combined Reuters-Thomson," which will effect the way Dow Jones shareholders evaluate the bid.
While DealBreaker may think that the "Rupert Murdoch desires Dow Jones" story has burned itself out in an orgy of navel-gazing and media self-obsession, well, there's nothing that excites us more! So let's have a quick recap of what people are saying today. The Times looks at the insider trading suit filed yesterday and notes that Dow Jones is "conducting an internal investigation into the actions of David K. P. Li, who is a longtime [Dow] director and a banker in Asia, people involved in the situation said." The Guardian suggests that, whatever the outcome of the proposed takeover, it has caused investors to reevaluate the worth of media properties. The Observer covers the letter-writing campaign from anxious staffers to the Bancroft family and offers an incredibly handy guide to the family itself.
And so it begins:
Slightly quiet on the "Rupert Murdoch craves Dow Jones" front. Still, today we learn that editors at the Wall Street Journal knew of the bid at least a week before it came out, but said nothing, and were thus beaten to the story by CNBC. The decision to sit on the story, says the Times "raises a nettlesome issue for the media: What are a news organization's obligations to report important market-moving news about itself or its parent company before the news is officially disclosed?" Ooh, nettlesome. Harsh words! Better—perhaps someone took advantage of the information for some money-making trading! Hello, SEC!
It's next week already, and dark lord Rupert Murdoch still craves Dow Jones. On Friday, the first shareholder, a minor one, filed suit against the standing-firm Bancroft family for not considering the Murdoch offer: That shareholder is a whiny little bitch from New Jersey and we imagine that claim will be thrown out faster than a cat litter box full of rotten squid. But how are the real players doing?
It's a fairly slow Murdoch-Dow Jones news day, even though we're only in day four of the friendly proposed takeover standoff. The biggest item of the day is a New York Times interview with Rupert Murdoch himself. Reading from notes at times, Murdoch says he would leave current Journal staff in place, he just wants to meet with the Bancroft family, he would be a hands-off owner, if the deal goes through he would insert the word "Journal" into the name of his Fox Business Journal, and that long stories in the paper bore him. (We sympathize.)
Today in the world's most important story: The Dow Jones board of directors chose to take no action on Murdoch's bid for their company. A voting majority oppose accepting the offer. Or do they really? Divisions in the three branches of the Bancroft family, combined with the amount News Corp. is willing to pay, may make it an offer they can't refuse. At least a few folks claim they literally may not have a choice: "a case for litigation" could be made should they turn down the bid. (Well, sorta maybe not so much, but maybe!)
Here's the most interesting speculation we've seen thus far on the state of play in the Murdoch/Dow Jones story:
On April 17, Rupert Murdoch made a $5 billion bid for the Dow Jones company, owner of the Wall Street Journal and other properties. Here's how it's playing out. A trustee for the Bancroft family, which controls Dow Jones through a dual-class stock structure, "said that members representing slightly more than 50 percent of the voting shares would oppose the current proposal." That sounds like a "no way"—but it really might be a ploy to jack up the price. Former Journalist Joe Nocera notes that the family has long disliked Murdoch's brand of newspaper, but at $60 a share, aesthetics become less important. Murdoch thinks there'll be a meeting about it all in a couple weeks. The Journal says the bid puts the family in an interesting spot: "Should the Bancrofts decide to pursue any deal, however, Dow Jones will have been considered 'in play' and its directors obligated to obtain the best deal possible."
So Rupert Murdoch's $5 billion bid for Dow Jones (that's about ten MySpaces, if you're scoring at home) has been confirmed by the company, which issued a statement saying that it is evaluating the offer. What are the odds that it's going to happen? An interesting predictor can be found in Ken Auletta's 2003 New Yorker profile of the Wall Street Journal and the Bancrofts—the family that controls Dow Jones through one of those ever-popular dual-share structures.) Auletta wrote that a sale was indeed a distinct possibility, but also pointed out a couple of stumbling blocks.
Just in: Rupert Murdoch and his fleet of News Corp. flying monkeys have made an unsolicited offer for Dow Jones, owner of the Wall Street Journal, for $60 a share. This morning, shares in Dow Jones were trading at around $36. The shares shot up to nearly $55 by 11:15 a.m., and trading has been halted. (Note nifty Yahoo finance graph!) Hold on to your hats! And pants! And mostly wallets!
News Corp. Bids For Dow Jones [CNBC]
As he enters his last week as the chairman of Dow Jones & Co., Peter R. Kann has a book review in today's Wall Street Journal Pursuits. It's about a biography of Dolly Schiff, the visionary lady who ran the New York Post from 1939 until 1976. Most of the way through, Kann's piece sounds like a tender love letter to Schiff and her Post—a paper he remembers as an "oasis of independent, albeit leftist, journalism in a gray era when the New York Times was blandly centrist and the rest of the New York press was scattered to the right."
