Murdoch offers $5 billion for Wall St. Journal owner
NEW YORK — Rupert Murdoch made a surprising $5-billion bid Tuesday for Dow Jones & Co., parent of the Wall Street Journal, a deal that would unite the most prestigious name in business journalism with News Corp. properties such as the Fox News channel, the New York Post, "American Idol" and MySpace.com.
The driving force behind the unsolicited offer appeared to be Murdoch's planned launch this summer of a financial news channel that would compete with CNBC. Dow Jones' expertise online also could help Murdoch move his worldwide newspaper empire more quickly into the digital era.
The $60-a-share offer by Murdoch's News Corp. represented a 65% premium over Dow Jones' Monday closing price of $36.33. It sparked a run-up in sluggish newspaper stocks, a panic in the Journal's newsroom and speculation that a bidding war could erupt for Dow Jones among some big names in media.
Potential bidders "are going to have to go home tonight and ask themselves if they'll ever get another chance like this," said John Linehan, portfolio manager for T. Rowe Price, whose 11.3% stake in Dow Jones makes it the largest shareholder after the Bancroft family, which holds 64% of the voting shares.
Names being floated on Wall Street as possible bidders included newspaper publishers Gannett Co. and New York Times Co.; Internet giants Google Inc. and Yahoo Inc.; Microsoft Corp.; and General Electric Co., parent of NBC Universal and cable TV's CNBC business channel.
Bloomberg, owner of Bloomberg News wire service and business news channel Bloomberg TV, killed speculation by saying it wasn't interested.
Murdoch indicated Tuesday that he might want to broaden the Journal's international reach by teaming it with some of News Corp.'s far-flung operations. Interviewed on Fox News on Tuesday afternoon, Murdoch said of Dow Jones: "It's got great journalists, it's got great management. But it's got rather a confined capital. It needs to be part of a bigger organization to be taken further."
However, Murdoch's bid drew opposition from members of the Bancroft family, which has controlled the paper since 1902. In a statement shortly before the stock market close, Dow Jones said family members holding "slightly more than 50%" of the voting power in the company's stock would oppose the transaction. It was unclear whether those family members thought the price was too low or were opposed to a sale on any terms. Also, because the Bancrofts hold 64% of the voting power, the statement hinted at dissension within the family.
