MAY DAY, MAY DAY WE ARE UNDER ATTACK
Dow Jones (DJ) just put out a press release stating they recieved an "Unsolicited acquisition proposal from News Corporation (NEWS). Thw WSJ reports it is a $5B takeover bid, and DJ was trading over $55 — up $19 — a 52% one day gain.
I rec’d media plays Dow Jones and Disney a few months ago on Bloomberg TV, but I had no clue that it was takeover bait.
This is potentially very bad news for CNBC — they are a joint venture of both NBC and Dow Jones. I would think that some senior people at CNBC are
asking pleading with GE execs to make a run at Dow Jones — if for no other reason than to keep the WSJ out of Rupert Murdoch’s hands.
Once GE owns Dow Jones, they could then spin out their entire media
group as NBC Universal — including NBC, CNBC, WSJ, Barron’s,
Marketwatch, etc. at a much higher valuation. If CBS has a $22B market cap, well then the entire NBC/WSJ/DJ/CNBC package should be in the $10-20B range, depending upon the total revenue range of all the media properties included.
In addition to GE, other potential bidders the Washington Post, the New York Times, and Bloomberg.
Murdoch’s obvious interest is using the Dow Jones infrastructure to power the News Corp Business channel which will be competing with CNBC sometime in the coming year. Once he owns Dow Jones, I would expect that CNBC as a joint WSJ/NBC product would be going bye-bye.
UPDATE 2 May 1,2007 3:04 pm
It may turned out that this was a very badly kept secret: Deal Journal notes:
"Monday, more than 4,300 Dow Jones call options changed hands,
bringing the total for the month to a little more than 10,000 contracts. That compares with about 7,000 over the first three months of the year.
guess? Maybe. Trading yesterday was heaviest in the contracts that
confer the right to buy the stock at $45 by late September, suggesting
that any insider knowledge of the timing an offer was, at the very
least, sketchy. If there were shenanigans, it would fit a pattern many
of the big deals in the takeover boom have followed."
– Deal Journal: Strange Trading in DJ Options
UPDATE May 1,2007 12:34 pm
I see Paul Kedrosky agrees with the idea of GE getting involved . . .
News Corp. Offers $60 a Share In Unsolicited Bid for Dow Jones
WSJ, May 1, 2007 12:17 p.m.
Dow Jones Confirms Unsolicited Acquisition Proposal from News Corp
Dow Jones (May 1, 2007)