Murdoch Bids for Wall Street Journal
Wednesday, May 2, 2007
Rupert Murdoch's News Corp. has made an unsolicited takeover bid for the parent company of the Wall Street Journal, an offer that generated nearly instant resistance from the company's controlling family and set up a media culture clash.
The offer seeks to marry the pinstriped Journal, widely regarded as the paper of record for the U.S. economy, and Murdoch's News Corp., home of "American Idol," Fox News Channel's Bill O'Reilly and the New York Post tabloid.
For Murdoch, the Journal would be a key component of the business news channel, a rival to CNBC, that he plans to launch on cable this year.
But first, Murdoch must persuade the Bancroft family, which controls more than 60 percent of Dow Jones & Co. voting power.
In a brief statement yesterday afternoon, Dow Jones director Michael B. Elefante -- the Bancrofts' representative on the board -- said family members and trustees told him that they would vote against Murdoch's proposal.
The board said it would consider the Bancroft opposition when considering Murdoch's offer, which at $60 a share represents a substantial premium over the stock's trading value. In a television interview yesterday, Murdoch said he hoped the Bancrofts would "take it calmly and think about" the offer. Dow Jones stock over the past year has traded in the $30s and topped $60 only once, in 2000, before the Sept. 11, 2001, terrorist attacks sent Journal advertising and Dow Jones shares down.
"There's plenty of time," Murdoch, 76, said during an interview on Fox News Channel's "Your World With Neil Cavuto."
The bid would offer cash or a mix of cash and stock for all outstanding Dow Jones stock, which closed Monday at $36.33 a share. The stock price rose 55 percent yesterday, to $56.20, after the bid. Murdoch's offer would be worth at least $5 billion, including existing debt. Late yesterday, News Corp. confirmed that the offer remained in place.
"It's a generous offer," Murdoch said. "We are the sort of people with the same traditions that I think will prove great guardians for this paper."
Some quarters disagreed.
"If Murdoch gets control of the Wall Street Journal and Dow Jones and if he follows the pattern of his past acquisitions, he will use the Wall Street Journal to serve his own purposes, financial and political," Ben H. Bagdikian, author and former dean of the journalism graduate school at the University of California at Berkeley, said in a statement.
The union representing Journal employees also opposed Murdoch's bid.