Rupert Murdoch’s bid for Dow Jones & Company is heating up again.
The family that controls Dow Jones agreed to meet with News Corporation, the media company headed by Murdoch . News Corp made an unsolicited bid for Dow Jones earlier this month. Until now the Bancroft family, which controls 64% of the voting power of Dow Jones largely through its super-voting class B shares, had refused to meet with Murdoch or representatives of Dow Jones to discuss the offer.
“Since first receiving the News Corporation proposal, the Family has carefully considered and discussed among ourselves and with our advisors how best to achieve that overarching objective, while serving the best interests of the Company’s various constituencies,” the family said in a preliminary statement first reported by the Wall Street Journal, which is owned by Dow Jones.
“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,” the statement says.
In early May, News Corp offered $5 billion for Dow Jones, a sixty-seven percent premium over where the stock price trading before the bid. Through representatives on the board of directors of Dow Jones, members of the Bancroft family representing a majority of the voting power declined the offer. The board of directors has officially take no action on the offer. Since making the bid Murdoch has attempted to win support from the Bancroft family, but he has not increased his offer. In recent weeks some analysts began predicting that Murdoch would withdraw the offer if the family continued to refuse to negotiate.
The Wall Street Journal said the statement would be finalized after the conclusion of a meeting of the board of directors, which was underway tonight. At the time this was posted, no statement had been filed with the Securities and Exchange Commission on behalf of Dow Jones or the Bancrofts.
The statement may mean that the Bancrofts are willing to accept an offer from Rupert Murdoch. But by indicating a willingness to sell, they may also be hoping to attract other bidders. Tonight’s statement affirms that the family will also consider other bids.
Bancroft Family Plans to Discuss Dow Jones Bid With News Corp. [Wall Street Journal]
Bancrofts’ Statement on Dow Jones Bid [Wall Street Journal]
Archive for May 2007
Rupert Murdoch’s bid for Dow Jones & Company is heating up again.
When Bankers Break Down!
By Bess Levin
Email Brawl Exposes the Brutal Hours and Boring Work Of Junior Investment Bankers
The extreme hours and often menial work that characterize the lives of many junior investment bankers were on display last night in an exchange between a first-year analyst and a more senior associate at a middle market investment bank. It all began with a note at 6:04 PM. Although the original back-and-forth was strictly between two colleagues, the emails were forwarded outside the firm by a later recipient. As these things are wont to do, the mêlée very quickly spread through investment banking circles.
The spat began after Roger asked Billy (we’re changing the names because we have been unable to reach the people involved) to put together a working group list for him within an hour. Working group lists are used by investment bankers and law firms to collect and disseminate the contact information of professionals working on a transaction. Putting the lists together is not difficult but it is notoriously boring work. Although Roger’s request is rather straight-forward, Billy objected to the request and told Roger he thought it sounded “testy.”
“There is really no reason to get testy, Roger,” Billy said. “I was here all night, you know that, and I am curious as to why you are passing this off to me. I am aware that it takes 5 minutes to do, but you should know there is a difference between ‘pushing back’ and wondering why (for the 2nd time this week) you are giving me in particular a WGL. I thought that’s what staffing is for.”
[The rest of the exchange, after the jump]
Hedge funds are often touted as “early adopters” of new investment methods and developing strategies for doing this super cool thing called making money. Algorithmic trading, long short (cutting edge when Alfred Jones did it), the free gift-with proxy battle giveaway. All started at hedge funds. So it stands to reason that HFs will probably be ahead of the curve when they fire all of their equity analysts, as Tanya Beder, quant industry vet and noted hater of equity analysts, thinks they ought to do. She thinks computers should replace the EAs who, through her hate-tinted glasses, aren’t pulling their weight, not to mention not doing anything that couldn’t be done by a computer.
“Given the same set of factors, it will always produce the same result,” Beder hissed today. “Its signals are pure and systematic.” She argues that the next logical step is to supplant equity analysts with machines, and soon. Beder didn’t get her all-star returns at Caxton by tying a bunch of dead weights to her payroll.
Sandy Gross is gentler with regard to the unnecessary leaches whose services are no longer required at their companies. It’s not that hedge funds necessarily want to gather up their non-performing flock, take them around back and fire a few rounds off, they have to, in order to make room for the quant “rocket scientists” for which there is a “great demand.” (Here’s a good example of the difference between hedge funds and Dealbreaker: we demand mediocrity at best.)
[Insert obligatory Ren Tech/DE Shaw chest bump here, which symbolizes the proven success of quants].
Brad Hintz, financial services analyst at AllianceBernstein, noted that “there are lots of arguments as to why equity analysts are doomed,” and even rambled off a few (“regulatory investigations into analyst conflicts, the technology stock crash.”) But you probably know something that Brad doesn’t. Feel free–dare we say encouraged– to share it with us now.
Equity analysts facing new quant challenge [Reuters]
Good news for the self consciously pudgy – now ice cream, cereals and granola may be able to give you cancer. Coca-Cola and Cargill are ready to release lines of products sweetened with rebiana, the latest low-calorie sweetener pending regulatory approval. The marketing rationale here is that as long as that calorie number on the package goes down, all is permitted (next up – low calorie bleach, low calorie gasoline). Now you can dip your trans-fat free french fries in that vanilla cookie dough blend without gaining a pound!
Coca-Cola also plans to make the obvious switch to rebiana in its soft drinks, in attempts to assuage the guilt of people who feel they need 200% of the recommended daily dose of B12 from sugar water (a market Coca-Cola now has covered courtesy of Glaceau).
Despite recent market share losses from the happy magic water and happy magic energy drink beverage categories, carbonated soft-drinks are the second most consumed food & drink item in the universe next to sandwiches, according to food industry analyst Harry Balzer at the NPD group (watch his MarketWatch commentary here).
Rebiana comes from a natural herb (the cyclohexatriene herb) and doesn’t add any calories – making it the presumed “holy grail” of sweeteners (or just the lowest calorie most sugary tasting of sweeteners).
Word on the Sweet [MarketWatch]
Caption Contest Thursday: If These Bankers Can’t Even Properly Execute A Waterfall, How Can You Expect Them To Increase Deal Volume?By Bess Levin
Finally, the financial journalism community (yes, it’s a community) offers us something more than meaningless commentary. David Weidner, who we love, gets service-y today over at MarketWatch with a nifty how-to guide, re: insider trading. We’ll get right down to it:
Things that work:
+ Be within earshot of the mergers and acquisitions department at your local Wall Street bank
+ Keep it simple; it’s when you start to get too intricate and show-off-y that people get suspicious
+ When emailing conspirators about the insider trading you’re doing together, speak in code, but not in tongue. Say things like “Let the fun begin,” and not “ǂʼaama nǃei zhu”
+ Stay modest: pull a fast one on the Securities and Exchange Commission 10, maybe 20 times. 9 times is too few (we’re in this to make money, not friends), 25 is too many.
Things that don’t work:
+ Allowing your trade calls to be recorded on your employer’s log.
+ Doing it with your wife
+ Recruiting conspirators at Turkish bathhouses
+ Laying out plans in Grand Central Terminal
The insider’s path to beating the market [MarketWatch]