It appears that though Dow Jones and Co. have already a working proposition on the table, they’re a bit hestitant to go all out for the Rupert Murdoch’s News Corp. deal for $5 billion.
Many anlaysts say that’s a good price at $60 a share. But what weighs heavily on the deal, nonetheless, is the so called "editorial independence" of the Wall Street Journal, which the Dow owns.
The younger generation of the Bancrofts family, the controlling shareholders, have convinced their elder relatives that should the deal fall apart and in the absence of another bid, Dow’s shares are going down the drain. That’s even more exaggerated when you look at the several potential suitors like Pearson and GE have walke away. Not to mention the new acquisition by Thomson Financial of Reuters information agency.
All said and done, the Bancrofts just simply don’t trust Murdoch to keep his nose out of the Journal, and the Australian-American billionaire investor is about to have the Bancrofts sell Dow Jones and controll it too – that sounds an awful lot like eating the cake and the icing as well.
In a last minute push Monday, some of the divided members of the Dow Jones board are meeting with Califonian billionaire Ronald Berkle to set up a deal with Dow’s employees union for a possible bid. Another last resort attempt is co-founder of MySpace, Brad Greenspan; he plans to offer $60 a share for part of Dow, while investing $250 million of the publishing firm. That sounds awfully complicated.
At some point, the Bancrofts wil have to face Murdoch – after all, its quite a fair bid, it will add significant growth to Murdoch’s media business, adding credibility from the Journal. And its unlikely that the price will go higher on that bid. It would have been more graceful for the Bancrofts, who have two third of the controlling vote to accept the buyout gracefully.
As far as the employees of the Journal are concerned, there is not a single company that would allow employees to run a business without interference at times from the management. With that point heeded, its the right time, its the right place, and its well overdue. Dow Jones needs to commit to this deal.
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