Murdoch eyes Wall Street Journal, makes $5-billion bid for Dow Jones

02 May 2007

Rupert Murdoch''s News Corp. has made an unsolicited offer to buy Dow Jones & Co. Inc., publisher of the Wall Street Journal for $5 billion — at an enterprise value (market value plus debt minus cash) of 15 times the projected 2007 earnings before interest, taxes, depreciation and amortisation.

News Corp''s bid is for all outstanding shares of Dow Jones'' common stock and Class B stock in cash, or in a combination of cash and News Corp''s stock, at $60-a-share, translating in to a 65-per cent premium to its closing price on Monday.

Analysts have described the high price premium offered by News Corp. to a "knockout punch." If the deal succeeds, Murdoch would become a major player in global financial news.

For Murdoch, owning Dow Jones would be a good strategic fit to his top rated cable news channel, Fox Business Channel, which could source a steady stream of real-time news from Dow Jones Newswires, analysis from Wall Street Journal and Barron''s reporters.

Calling it a friendly offer, News Corp made the bid a few days before Dow Jones'' annual shareholders meeting on 18 April.

Dow Jones said yesterday that its board of directors and trustees of the controlling Bancroft family were evaluating the bid.