News Corp. Makes Unsolicited Bid For Dow Jones & Co
Tuesday, May 1st 2007, 12:41 pm
By: News On 6
NEW YORK (AP) _ Dow Jones & Co., publisher of The Wall Street Journal, said Tuesday it received an unsolicited bid from Rupert Murdoch's News Corp. to buy the company for $5 billion. The news sent its shares soaring and those of other newspaper companies higher.
Dow Jones issued a brief statement confirming that its board had received the offer from News Corp. to buy the company at $60 a share, either in cash or a combination of cash and News Corp. stock.
Dow Jones is controlled by the Bancroft family through a special class of shares and cannot be taken over without their consent. The company said that its board and members of the family were evaluating the proposal, and that there was no assurance it would lead to a transaction.
Shares of Dow Jones initially surged almost 60 percent in late morning trading after the financial news network CNBC reported on the takeover bid. That led to a trading halt that was lifted after Dow Jones confirmed details of the offer.
After trading resumed, Dow Jones' shares shot to $54.75, up $18.42 or 50.7 percent, in heavy volume on the New York Stock Exchange after reaching as high as $57.88. They had opened the day at $37.12 and have traded in a 52-week range of $32.16 to $40.08 before Tuesday's news.
A spokesman for Dow Jones said the company had no other comment beyond its statement. Spokesmen News Corp. and the Bancroft family did not immediately return calls seeking additional comment.
Like other newspaper publishers, Dow Jones' shares have been beaten down over the past few years amid sluggish advertising and rapidly changing media consumption habits as more readers and advertising dollars move to the Internet.
But that hasn't prevented an unprecedented level of acquisition activity in the industry. Earlier this month Tribune Co. agreed to go private in an $8 billion deal led by real estate investor Sam Zell, and last year McClatchy Co. acquried what was then the second-largest newspaper publisher in the country, Knight Ridder Inc., following a shareholder revolt.
Also, the New York Times Co., which like Dow Jones and several other newspaper companies is controlled by a family through a special class of shares, is facing investor unrest over its own sluggish financial performance. Last week shareholders withheld 42 percent of their votes for directors, a public rebuke to the Sulzberger family, which controls the company.
Shares of McClatchy gained $1.45, or 5 percent, to $30.35 on the NYSE. Shares of Washington Post Co., another publisher with two classes of shares, gained $21, or 2.8 percent, to $765 on the NYSE. And New York Times's stock gained $21.31, or 5.6 percent, to $24.71 on the NYSE.
News Corp. started out in the newspaper business and still owns a large number of papers, largely in the United Kingdom and Australia, including The Sun tabloid in England, The Times of London and the New York Post.
The company is now a major global media conglomerate and owns the Fox broadcast network, Fox News Channel, MySpace, the Twentieth Century Fox studio and satellite broadcasters in Europe and Asia.
In addition to The Wall Street Journal, Dow Jones also publishes Dow Jones Newswires, Barron's, several leading market indicators including the Dow Jones industrial average and a group of community newspapers.