Family declines Murdoch bid for Dow Jones

Rupert Murdoch’s News Corp., owner of Fox News Channel and the New York Post, made a $5 billion unsolicited bid for Dow Jones & Co. that the Wall Street Journal parent’s controlling family rejected yesterday.

The Bancroft family, which owns more than 60 percent of the voting stock in Dow Jones, will vote against the $60-per-share proposal from the Australian media mogul, Dow Jones said last night.

“Dow Jones said its board would factor this information into its evaluation,” its statement said.

It remains to be seen whether Dow Jones, which also owns a newswire, the financial weekly Barron’s and the Dow Jones Industrial Average, is dead set against a takeover or if the New York company is simply baiting News Corp. and other potential bidders to raise the stakes above what was an already premium bid.

“It’s not surprising,” said Larry Grimes, president of W.B. Grimes & Co., a Gaithersburg firm that handles media mergers. “You get an unsolicited offer, it’s kind of standard practice not to just accept the first offer that comes on the table but to see if there’s any room for negotiation.”

A Dow Jones spokeswoman would not comment further and a representative for the Bancroft family did not return a call seeking comment last night.

News Corp. made the overture — which it described as “friendly” — two weeks ago in a letter to the Dow Jones board, CNBC first reported yesterday. The news vaulted shares of Dow Jones nearly 60 percent, from $36.33 to $56.20 on the New York Stock Exchange.

Mr. Grimes, who doesn’t own any shares of either company, said he would have advised the Bancroft family to reject the offer even if they were interested in it.

“I would say, ‘Hey it’s great that somebody has shown an interest and now they’ve set the bar at $60 a share, maybe indeed that bar can go significantly higher. We don’t know who else is interested, but guess what, we’re going to find out real quick,’ ” said Mr. Grimes, who speculated that the company has already heard from other potential buyers.

News Corp. did not respond to requests for comment and had not issued a statement in response to the Bancroft family’s announcement.

Before the Bancrofts made their views known, Mr. Murdoch spoke to Fox News host Neil Cavuto about his desire to own the Wall Street Journal.

“This is the greatest newspaper in America, one of the greatest in the world,” he said on Mr. Cavuto’s show yesterday afternoon. “But it’s got a really confined capital. It needs to be part of a bigger organization to be taken further.”

Mr. Murdoch’s offer values shares of Dow Jones about 50 percent above their 52-week high at a time when newspapers across the country have been struggling to retain subscribers and advertisers as both migrate to the Internet.

“It’s certainly a premium price they have offered when comparing it to other daily newspaper deals that have recently gone down,” Mr. Grimes noted. “However, this is not your traditional daily newspaper. This is a much more significant international franchise.”

Edward Atorino, a media analyst for the Benchmark Co., said he has “a feeling this will end up in court.”

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