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May 31, 2007
The Bancrofts Will Sell To Murdoch
Enough of the Bancroft family, the members of which own 52 percent of the voting stock of Dow Jones & Co., owner of the Wall Street Journal, will vote to sell a controlling interest to Rupert Murdoch’s New Corp. by the end of this year.
I’m betting that Murdoch will sweeten and restructure the deal. He’s offered about $5 billion, or $64 per share, which is a big premium over the current stock price of $53.31, which is a huge jump over $36.28 as of May 1, when Murdoch made his offer. He’ll offer more and structure the deal so that the Bancrofts don’t get cash, but get a piece of News Corp. or a separate tracking stock of a new Dow Jones & Company (a smart lawyer friend of mine suggested this would be the best move).
With this kind of a deal, the Bancrofts wouldn’t have to pay capital gains taxes and would get around $5 billion in stock in a company that is sure to grow a lot more than the current Dow Jones & Company stock, which is mired deep in the mud. Poor management has stalled the company and its crown jewel, the Wall Street Journal.
The Bancrofts are absentee owners and have been living grandly off of money coming from a declining asset. They may not be too swift, but I doubt that all of the members of the family are so dumb that they don’t see the writing on the wall. They’ll sell by the end of the year.
And when Murdoch takes control of the Wall Street Journal, will he change it? I think the changes will be so minor that the average reader won’t notice it. If I’m wrong on either count, I’ll buy you lunch.
Posted by Charles Warner at May 31, 2007 05:03 PM
Comments
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at June 1, 2007 11:25 AM writes:
Paul - Lunch at Palm Too under my cartoon on the wall will be fine, and will be delighted for you to pay.
I don't think anyone else will bid what Murdoch will because no one has the potential synergies, especially the new Fox Business News network. I think the Bancrofts realize this because today it was announced that they had agreed to meet with Murdoch--we're witnessing the end game.
I'l really enjoy lunch.
Paul Talbot at June 1, 2007 11:15 AM writes:
Charlie... either the Palm, Palm II or 21 will work just fine.
So rather than speculate on what Murdoch may or may not do with or to Dow Jones, wouldn't it more fun to speculate on who he'll find himself in a bidding war with?
Why not Warren Buffet? Why not Bloomberg? Why not a private investment firm most of us have never heard of?
Early innings.
And Sparks would be OK, too.
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