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