Dow Jones's Board Takes No Action on Murdoch Bid

Includes: DJ, NWS
by: Judith Levy

The board of publisher Dow Jones & Co. held its regularly scheduled meeting Wednesday and declined to take action on a $5 billion bid for the company made by Rupert Murdoch's News Corporation. On May 11, Murdoch sent a letter to the Bancroft family, which holds a controlling interest. In the letter, Murdoch urged family members to meet him personally and pledged to establish an editorial board for the purpose of ensuring the integrity of Dow Jones's prize property, the Wall Street Journal. At the meeting, the board discussed several matters, including the adoption of "change-of-control packages" to attract executives. Although the board has the option to consider Murdoch's offer and make a recommendation to shareholders, it has elected not to do so until the Bancrofts' opposition falls below 50% of overall voting power. Several board members have, however, expressed surprise that the Bancrofts are so resistant to such a high offer. Murdoch's bid represents a 65% premium to the shares' close the day before the offer was announced. Bancrofts who oppose the offer hold 52% of voting power; the Ottaway family, which holds 5.2%, also opposes the deal.

Sources: MarketWatch, Reuters, Wall Street Journal
Commentary: Murdoch Writes to Bancrofts, Family Stays Mum • Is Dow Jones An Attractive Arbitrage Play? • Dow Jones: Murdoch Needs To Break Out
Stocks/ETFs to watch: Dow Jones & Company Inc. (DJ), News Corp. (NASDAQ:NWS). Competitors: Gannett Co. Inc. (NYSE:GCI), The New York Times Co. (NYSE:NYT), Washington Post Co. (WPO), Pearson plc (NYSE:PSO), Reuters Group plc (RTRSY), Lee Enterprises Inc. (NYSE:LEE), McClatchy Company (NYSEMKT:MNI)
Conference call transcripts: Dow Jones Q1 2007, News Corporation F3Q07

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