hideyoursheep
06-11-2007, 12:20 PM
The family that controls Dow Jones & Company, publisher of The Wall Street Journal, announced yesterday that it would consider selling the company, ending more than a century of family ownership.
The announcement came after the family, the Bancrofts, said that it was willing to meet with Rupert Murdoch’s News Corporation, just weeks after the family rejected a $5 billion takeover offer from Mr. Murdoch.
Mr. Murdoch requested a personal meeting with the Bancrofts weeks ago, saying that he wanted his family and theirs to become acquainted. Until yesterday, there had been no reply to that overture.
The decision represents a remarkable about-face for both the company and Mr. Murdoch’s bid. A successful deal would mean a huge victory for Mr. Murdoch, the Australian media mogul, and new ownership for The Wall Street Journal, the second-largest newspaper in the country by circulation and one of the great names in American journalism.
“After a detailed review of the business of Dow Jones and the evolving competitive environment in which it operates, the family has reached consensus that the mission of Dow Jones may be better accomplished in combination or collaboration with another organization, which may include News Corporation,” a statement from the family said.
According to people close to both News Corporation and to the Bancroft family, there are no immediate plans for the meeting, but one family member said it would be “sooner rather than later.”
Yesterday’s announcement does not necessarily mean that Mr. Murdoch will capture Dow Jones, which he has long coveted. Now that the family has thrown open the doors, other bidders could emerge, like Bloomberg L.P., the General Electric Company or the former head of the American International Group, Maurice R. Greenberg, all of whom have been rumored to be interested. Or the family could consider other arrangements, like selling part of the company or looking for a co-investor.
According to a person close to the Bancrofts, not every family member has embraced the idea of talking to News Corporation, but a sufficient number have at least become open to the idea of pursuing some kind of dialogue with potential buyers. “But openness to talking does not necessarily mean openness to selling to News Corp.,” this person said.
According to people close to the family who declined to be identified because they are not authorized to speak, the family wants any bidder to meet two conditions. The first is more money, which means that any bidder, including Mr. Murdoch, would have to top his initial offer of $60 a share. Second, and perhaps more important, the family wants an independent overseer to guarantee what it called “the editorial independence and integrity of The Wall Street Journal.”
“For a lot of people, the main issue is hearing how real his promises are about integrity and independence,” said the family member, who declined to be identified because this person was not authorized to speak for the family. “But price is also on the table.”
While the Bancrofts originally came out against Mr. Murdoch’s offer, people close to the family now suggest that its straw poll may have been taken too quickly and did not represent the views of everyone.
Moreover, some family members who seemed to be Mr. Murdoch’s staunchest opponents decided, in the end, to consider a sale. One such member was Christopher Bancroft, who just last week told The Wall Street Journal: “I’m open to any situation that benefits The Wall Street Journal and Dow Jones and its shareholders. At the moment, I don’t see anything that would do that.”
People close to the family now say that Mr. Bancroft’s comments may have been a negotiating tactic. “There’s been a whole series of stages of this,” another family member said. “It wasn’t any one event or one time that people came around. But this consensus has been evolving over the last couple of weeks as we watched what’s in the news, as we talked to investment advisers.”
The company’s stock, which traded above $70 in 2000, was trading around $36 in late April, which was after Mr. Murdoch made his bid, but before it became public on May 1. After news of the offer, the share price rose to $58.47. It closed yesterday at $53.31, then rose as high as $59.79 in after-hours trading.
The Bancrofts are the descendants of Jessie Waldron Barron, the wife of Clarence W. Barron, who bought the company in 1902, 20 years after its founding by Charles Dow and Edward Jones. In addition to The Journal, Dow Jones publishes the financial weekly Barron’s and owns Dow Jones Newswires, Dow Jones Indexes and MarketWatch.com, as well as other properties.
With only 52 percent of the company’s shareholders opposed to Mr. Murdoch’s initial deal, it did not take many family members to tip the balance in favor of exploring a deal.
Over the last several weeks, a variety of factors have swayed different strains of the Bancroft family to at least meet with Mr. Murdoch. His third letter to the family, offering an independent board to oversee the editorial integrity of The Journal, weighed heavily on some family members, said some family members.
More decisive was a presentation given by the chief executive of Dow Jones, Richard F. Zannino, that laid out the company’s future with and without a sale. For several family members, Mr. Zannino was far more persuasive in describing the former, suggesting that the company was unlikely to achieve results that would match Mr. Murdoch’s offer.
A series of outside factors also played a role: the proposed merger of the Reuters agency and the Thomson Corporation changed some minds, as did a speech by the chief marketing officer for Macy’s stores, in which she explained why her company was moving ad dollars to other media like TV, magazines and the Internet while she questioned the relevance of newspapers.
“Obviously, the Thomson deal is yet another of a myriad of factors that would make you think that you might need to be bigger to compete,” said the family member, adding that the more the family heard from its trustees and advisers at Merrill Lynch and at Wachtell, Lipton, Rosen & Katz, the more some of the older Bancrofts came to believe that holding on to the company was not a great business strategy.
Despite its journalistic reputation, Dow Jones has often struggled financially for 15 years. As business information began to be transmitted electronically, Dow Jones got caught in the downdraft caused by readers and advertisers migrating to the Web. The Journal itself, despite weekday circulation of more than two million, second only to USA Today in the United States, has lagged far behind most major papers in profit margin.
In the past few years, Dow Jones has attempted to transform itself by buying the online investing site MarketWatch.com, completing its purchase of the database Factiva and starting to charge a subscription fee for online access to The Journal. The company also took some radical steps at the paper edition of The Journal, trimming its size and, in 2005, starting a Saturday edition to attract more advertising, especially in categories like fashion, travel and real estate.
The Faux Noise mogul believes he's "heir apparent" to Dow and the Jounal. Yet another vehicle to push his agenda down the throats of unsuspecting Americans. Even the Bancroft's, as much as they want to unload it, are having difficulty wrapping themselves around the fact that Murdoch may wind up destroying the integrity this paper once had.
BUYER BEWARE!
The announcement came after the family, the Bancrofts, said that it was willing to meet with Rupert Murdoch’s News Corporation, just weeks after the family rejected a $5 billion takeover offer from Mr. Murdoch.
Mr. Murdoch requested a personal meeting with the Bancrofts weeks ago, saying that he wanted his family and theirs to become acquainted. Until yesterday, there had been no reply to that overture.
The decision represents a remarkable about-face for both the company and Mr. Murdoch’s bid. A successful deal would mean a huge victory for Mr. Murdoch, the Australian media mogul, and new ownership for The Wall Street Journal, the second-largest newspaper in the country by circulation and one of the great names in American journalism.
“After a detailed review of the business of Dow Jones and the evolving competitive environment in which it operates, the family has reached consensus that the mission of Dow Jones may be better accomplished in combination or collaboration with another organization, which may include News Corporation,” a statement from the family said.
According to people close to both News Corporation and to the Bancroft family, there are no immediate plans for the meeting, but one family member said it would be “sooner rather than later.”
Yesterday’s announcement does not necessarily mean that Mr. Murdoch will capture Dow Jones, which he has long coveted. Now that the family has thrown open the doors, other bidders could emerge, like Bloomberg L.P., the General Electric Company or the former head of the American International Group, Maurice R. Greenberg, all of whom have been rumored to be interested. Or the family could consider other arrangements, like selling part of the company or looking for a co-investor.
According to a person close to the Bancrofts, not every family member has embraced the idea of talking to News Corporation, but a sufficient number have at least become open to the idea of pursuing some kind of dialogue with potential buyers. “But openness to talking does not necessarily mean openness to selling to News Corp.,” this person said.
According to people close to the family who declined to be identified because they are not authorized to speak, the family wants any bidder to meet two conditions. The first is more money, which means that any bidder, including Mr. Murdoch, would have to top his initial offer of $60 a share. Second, and perhaps more important, the family wants an independent overseer to guarantee what it called “the editorial independence and integrity of The Wall Street Journal.”
“For a lot of people, the main issue is hearing how real his promises are about integrity and independence,” said the family member, who declined to be identified because this person was not authorized to speak for the family. “But price is also on the table.”
While the Bancrofts originally came out against Mr. Murdoch’s offer, people close to the family now suggest that its straw poll may have been taken too quickly and did not represent the views of everyone.
Moreover, some family members who seemed to be Mr. Murdoch’s staunchest opponents decided, in the end, to consider a sale. One such member was Christopher Bancroft, who just last week told The Wall Street Journal: “I’m open to any situation that benefits The Wall Street Journal and Dow Jones and its shareholders. At the moment, I don’t see anything that would do that.”
People close to the family now say that Mr. Bancroft’s comments may have been a negotiating tactic. “There’s been a whole series of stages of this,” another family member said. “It wasn’t any one event or one time that people came around. But this consensus has been evolving over the last couple of weeks as we watched what’s in the news, as we talked to investment advisers.”
The company’s stock, which traded above $70 in 2000, was trading around $36 in late April, which was after Mr. Murdoch made his bid, but before it became public on May 1. After news of the offer, the share price rose to $58.47. It closed yesterday at $53.31, then rose as high as $59.79 in after-hours trading.
The Bancrofts are the descendants of Jessie Waldron Barron, the wife of Clarence W. Barron, who bought the company in 1902, 20 years after its founding by Charles Dow and Edward Jones. In addition to The Journal, Dow Jones publishes the financial weekly Barron’s and owns Dow Jones Newswires, Dow Jones Indexes and MarketWatch.com, as well as other properties.
With only 52 percent of the company’s shareholders opposed to Mr. Murdoch’s initial deal, it did not take many family members to tip the balance in favor of exploring a deal.
Over the last several weeks, a variety of factors have swayed different strains of the Bancroft family to at least meet with Mr. Murdoch. His third letter to the family, offering an independent board to oversee the editorial integrity of The Journal, weighed heavily on some family members, said some family members.
More decisive was a presentation given by the chief executive of Dow Jones, Richard F. Zannino, that laid out the company’s future with and without a sale. For several family members, Mr. Zannino was far more persuasive in describing the former, suggesting that the company was unlikely to achieve results that would match Mr. Murdoch’s offer.
A series of outside factors also played a role: the proposed merger of the Reuters agency and the Thomson Corporation changed some minds, as did a speech by the chief marketing officer for Macy’s stores, in which she explained why her company was moving ad dollars to other media like TV, magazines and the Internet while she questioned the relevance of newspapers.
“Obviously, the Thomson deal is yet another of a myriad of factors that would make you think that you might need to be bigger to compete,” said the family member, adding that the more the family heard from its trustees and advisers at Merrill Lynch and at Wachtell, Lipton, Rosen & Katz, the more some of the older Bancrofts came to believe that holding on to the company was not a great business strategy.
Despite its journalistic reputation, Dow Jones has often struggled financially for 15 years. As business information began to be transmitted electronically, Dow Jones got caught in the downdraft caused by readers and advertisers migrating to the Web. The Journal itself, despite weekday circulation of more than two million, second only to USA Today in the United States, has lagged far behind most major papers in profit margin.
In the past few years, Dow Jones has attempted to transform itself by buying the online investing site MarketWatch.com, completing its purchase of the database Factiva and starting to charge a subscription fee for online access to The Journal. The company also took some radical steps at the paper edition of The Journal, trimming its size and, in 2005, starting a Saturday edition to attract more advertising, especially in categories like fashion, travel and real estate.
The Faux Noise mogul believes he's "heir apparent" to Dow and the Jounal. Yet another vehicle to push his agenda down the throats of unsuspecting Americans. Even the Bancroft's, as much as they want to unload it, are having difficulty wrapping themselves around the fact that Murdoch may wind up destroying the integrity this paper once had.
BUYER BEWARE!