Possible New Suitor for Dow Jones
Tuesday, June 19, 2007
General Electric and Pearson, which publishes the Financial Times, are in talks to make a joint offer for Dow Jones and give the publisher's controlling Bancroft family a minority stake in a new company, a person with knowledge of the plan said yesterday.
Under the plan, GE's CNBC unit and Pearson's Financial Times would merge with Dow Jones, owner of the Wall Street Journal, in a closely held venture, said the person, who spoke on condition of anonymity because the talks were private and preliminary.
An offer would counter the bid of $60 per share by Rupert Murdoch as he and the Bancrofts negotiate a separate oversight board for the Journal. The Bancroft family said last week that it was still working on a proposal to send to Murdoch's News Corp. designed to protect the newspaper's editorial independence.
"The $60 offer was already well outside the realm of traditional valuations for newspaper assets," said Brian Shipman, an analyst at UBS who last week cut his rating on Dow Jones shares to "reduce." "Going higher than that looks very risky."
Shares of Dow Jones of New York rose 2 cents, to $59.03, on New York Stock Exchange. Shares gained 1.9 percent Friday after the Journal reported that Pearson was reaching out to potential partners, including GE, about a bid.
Andrea Grinbaum, a spokeswoman for Dow Jones, said she had no information. Roy Winnick, a spokesman for the Bancroft family, said he "can't comment on rumors." Luke Swanson, a spokesman for Pearson, and Kathy Kelly-Brown, a spokeswoman for GE's NBC Universal, both declined to comment on the report.
GE of Fairfield, Conn., and Pearson are discussing a plan in which they would each hold 40 to 45 percent of the new company and leave the Bancrofts with a 10 to 20 percent stake, the Wall Street Journal reported Sunday. The structure would allow some family members to sell their Dow Jones shares and let others roll their stock into the venture to avoid taxes, the newspaper said.
The Bancrofts said in a May 31 statement that they would consider offers for Dow Jones, including the $5 billion bid from Murdoch's News Corp. That offer is 65 percent higher than Dow Jones's closing price April 30, a day before the bid became public. News Corp. spokesman Andrew Butcher declined to comment.