Dow Jones Owners to Consider Murdoch Bid

“A Midtown Manhattan office of the Wall Street Journal is seen May 4, 2007. i i

A Midtown Manhattan office of the Wall Street Journal is seen May 4, 2007. Chris Hondros/Getty Images hide caption

itoggle caption Chris Hondros/Getty Images
“A Midtown Manhattan office of the Wall Street Journal is seen May 4, 2007.

A Midtown Manhattan office of the Wall Street Journal is seen May 4, 2007.

Chris Hondros/Getty Images

Members of the Bancroft family, who hold a controlling interest in Dow Jones & Co., publisher of The Wall Street Journal, agree to consider media mogul Rupert Murdoch's $5 billion bid for the financial news publisher.

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STEVE INSKEEP, host:

It's MORNING EDITION from NPR News. I'm Steve Inskeep.

When the owners of the Wall Street Journal said they would never sell to Rupert Murdoch, plenty of analysts wondered if never really meant never. Murdoch was offering to pay $5 billion, a very high price for the company that owns the newspaper. And now the Bancrofts, the family that said never, has changed that to maybe. NPR's David Folkenflik covers the media. And David, what actions are the Bancrofts taking?

DAVID FOLKENFLIK: Well, as you say, I guess it's like the "Bond" movie, "Never Say Never Again." They've done essentially a 180-degree turn, saying they will entertain bids from Rupert Murdoch and his News Corporation, as well as for other potential suitors, although none have yet emerged. They're actually going to actively meet with him and company officials to consider his offer.

INSKEEP: Why didn't they agree to talk before?

FOLKENFLIK: Well, Rupert Murdoch is Rupert Murdoch, which is he's brash, he comes from Australia, he comes from a very different press tradition. The Bancrofts are sort of, you know, journalistic aristocracy, like the Sulzbergers of the New York Times or the Graham family for the Washington Post. He has a tradition of using some of his properties, his critics and even some of his former employees, say, to cozy up to power to leverage his assets as media outlets.

In China, for example, he took several actions that were criticized, seen as cozying up to authorities there in a way that would allow him to get concessions for his media properties. He was seen as backing a number of conservative candidates through his outlets in London, but then surprisingly cozying up to Prime Minister Blair there when that became expedient.

INSKEEP: Okay, so you say Rupert Murdoch is Rupert Murdoch, head of News Corp., worldwide media tycoon. He's still Rupert Murdoch; what's changed?

FOLKENFLIK: Well, Dow Jones is a smart company about economics and the business world, obviously. They publish the Wall Street Journal. In terms of how they've handled themselves, however, they've done less well. They've performed very, very sluggishly, in fact a steep fall-off from the Internet boom to where we are now. They've been affected by a lot of the same things that have hit a lot of newspaper companies.

They also made a series of kind of business blunders along the way. They could have, for example, held on to what became CNBC, or at least a significant stake. They could have invested in things like Comcast. These are seen as opportunities that were lost for them to figure out a way to diversify.

In the meantime, the family controls about 64 percent of the voting stock, but there are a lot of other investors out there, and they're saying, hey, this is an opportunity. We can get real money. Murdoch made what seemed like a sort of preposterous offer for the company, offering two thirds over what was then the stock value for the company a month ago when he made this unsolicited bid.

INSKEEP: Well, that explains why the family might want to consider this offer, but has Murdoch himself done something to persuade the Bancrofts that he's not going to ruin the Wall Street Journal?

FOLKENFLIK: Murdoch has made some promises to insulate the paper from interference. But in the last month the family has been hoping for a white knight to pop in and make a comparable offer, a Warren Buffett or a Bill Gates, for example. It hasn't happened. In the meantime, investors are clearly signaling that this is the moment for the Bancrofts to sell. If they don't take this offer, they're not going to take anything, and that would signal that the shares would drop very much in value.

INSKEEP: Okay, David. Thanks very much.

FOLKENFLIK: You bet.

INSKEEP: NPR's David Folkenflik is in New York. He's covering the story of Rupert Murdoch's News Corporation, which will be talking with the Bancroft family, the dominant owners of Dow Jones, which controls the Wall Street Journal.

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Wall Street Journal Considers Takeover Deal

Shares in the parent company of The Wall Street Journal surged on Friday, after the family that owns a controlling stake in the respected publisher said they will discuss a takeover offer from media mogul Rupert Murdoch's News Corp.

The Bancroft family, which own 65 percent of the voting shares in Dow Jones & Co., announced Thursday they are ready to meet with Murdoch. They also said they will consider other bidders for the company.

Stocks of Dow Jones were at $53.31 in early trading on Friday, but jumped to $61.27 by the close of the day. That compares with a finish of $36.33 at the end of April.

In April, Murdoch offered $5 billion for Dow Jones, but his offer was quickly rebuffed. Dow Jones employees and others raised concerns that Murdoch would not maintain the Dow Jones' high editorial standards. Murdoch's media empire includes Fox News, the New York Post and British tabloids The Sun and The Times.

But after a special meeting of the Dow Jones board of directors on Thursday, the family decided to reconsider. A statement from the family said, "After a detailed review of the business of Dow Jones and the evolving competitive environment in which it operates, the family has reached consensus that the mission of Dow Jones may be better accomplished in combination or collaboration with another organization, which may include News Corporation."

And the financial news environment is about to get much more competitive. In a deal that become public days after the Bancroft's nixed Murdoch's initial offer, it was announced that Dow Jones competitor Reuters Group PLC would merge with Thomson Corp. in a deal worth $17.2 billion.

Murdoch has also said he would invest in the Journalto allay the Bancrofts' concerns and ensure the paper's editorial independence.

The Wall Street Journal is among the most widely read newspapers in the world and is the flagship of Dow Jones' publications. The company also publishes the financial magazine Barron's and holds a portfolio of community newspapers as well as distributing a variety of financial data. Its sales were $1.8 billion last year.

Murdoch's News Corp. — significantly bigger and wealthier with $25 billion in sales last year — wants to buy Dow Jones to fortify its financial news operation. That would catapult it ahead of the Reuters and Bloomberg news agencies that are known for providing real-time financial information.

Like several other newspaper publishers including The New York Times Co. and The Washington Post Co., Dow Jones is a public company but remains controlled by a family through a special class of shares with powerful voting rights.

From NPR reports and The Associated Press

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