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THE MEDIA : Dow Jones Makes an Offer for Remainder of Telerate

September 22, 1989|From Reuters

NEW YORK — Dow Jones & Co., moving to consolidate its role in the lucrative field of electronic publishing, said Thursday that it offered to buy the rest of Telerate Inc., the financial data service, for about $576 million.

Dow Jones, the publisher of the Wall Street Journal, which owns about two-thirds of Telerate, proposed paying $18 a share for the 32 million shares it does not already own.

The bid values all of Telerate at about $1.72 billion. It represents a substantial premium over Telerate's $15.125 market price at Wednesday's close.

Prepared to Meet

But Wall Street traders placed bets that the publishing giant would eventually have to pay even more for the rest of Telerate, and lifted its stock $5.25 to close at $20.375. It was the most actively traded issue on the New York Stock Exchange.

Dow Jones said it is prepared to meet with Telerate to discuss the proposal, which traders took as a signal that the company may be willing to raise its offer.

Telerate, founded two decades ago, pioneered the booming business of providing real-time financial information to banks, brokers and corporations, using a global network of video terminals.

Dow Jones, also a major player in electronic news with its computer-based Dow Jones News Retrieval, began building a stake in Telerate a few years ago. It has long been expected to buy all of Telerate's stock at some point.

Dow Jones currently owns 63.6 million Telerate common shares, or about 66.2% of the total.

Directors of Telerate concluded a regularly scheduled meeting Thursday after Dow Jones announced its bid.

A Telerate spokesman said Neil Hirsch, Telerate president and chief executive, had no comment on the offer. Late in the day, the company said it selected two independent directors to examine the Dow Jones bid.

Value May Be Higher

While Dow Jones has a controlling interest in Telerate, traders figured that the target may need to compel a higher bid from its majority owner.

"The directors have to demand what they consider a fair price for the minority shareholders," said one stock speculator who asked not to be named.

Traders said the value of the company has been put by some analysts as high as $25 per share, or $2.39 billion.

But some noted that a recent scarcity of takeover announcements had speculators eager to pour cash into the stock.

Dow Jones said that early next week it will start a tender offer for all Telerate shares it does not own at $18 each, in a proposal that will expire Nov. 3.

Dow Jones said that after the tender, if it were to own more than 90% of Telerate or reach an acquisition agreement with the company, it will acquire remaining Telerate shares for the tender price.

Dow Jones shares closed off 37.5 cents at $37.125.

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