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Dow
It’s finally pretty much almost over. Rupert Murdoch has secured enough Bancroft family shareholder votes to move forward with his $60-a-share, $5bn bid, one future News Corp holding reports.
One day after a Murdoch spokesperson said the deal was “highly unlikely,” the Denver branch of the Bancroft family, previously holding out for a higher offer, capitulated, giving News Corp at least 32% of the family vote. Nonetheless, one Bancroft family spokesperson said today, “Any suggestion that the process has been completed and/or that a particular level of support has been established is at this point premature.”
Both companies have board meetings this evening to formulate the take-over procedure. Dow Jones is trading up 7.04% to $57.50 today.
News Corp. Appears to Have Enough Votes to Clinch Deal [Wall Street Journal]
Murdoch Seen to Win Control of Dow Jones [NY Times]
Rupert Murdoch’s bid for Dow Jones, once a sure thing, then “too close to call,” is now “highly unlikely” unless the Bancroft family increases its support of the deal by 5 p.m. today, the Wall Street Journal reports.
At the moment, 28% of Dow Jones’ voting power supports the deal, although it is unclear what percentage of Bancrofts voted affirmatively; 30% of the family needs to support Murdoch for his $5bn bid to go through. If this is not met, “News Corp likely wouldn’t take the deal to a full Dow Jones shareholder vote.”
After all the mud-slinging and Rupe’s cryptic commentary, this summer’s saga could come to a close tonight, in which case I will have no idea what to write about.
News Corp. Says It’s ‘Highly Unlikely’ To Buy Dow Jones at Current Count [Wall Street Journal]
Renaming an institution like the Dow Jones Industrial Average and getting people to use its new name is a pretty difficult task. It’s doubtful that either residents or tourists living near or travelling to Auschwitz-Birkenau will take the extra effort to say “Former Nazi German Concentration Camp Auschwitz-Birkenau,” though Poland is hoping we’re wrong (it’s happened). Still, it seems like there’s a chance that Rupert Murdoch suddenly get all egomaniacal upon acquiring Dow Jones, and want to brand his territory.
Thestreet.com took a shot today and came up with: “The Fox Dow Jones Industrial Average,” “The Fox Business Network Average” and “The Rupert and Wendi Murdoch Industrial Average,” submissions that don’t want to call “awful” but maybe “not good.” Definitely “not funny.” Unfortunately, it’s easier to call out other people’s shoddy ideas than come up with your own, which is our way of saying, “we’ve got nothing.” (Carney nixed Asians Keep You Young Industrial Average). So, let us know if you’ve got anything.
Ready for the Fox Dow Jones Industrials? [thestreet.com]
Outspoken publisher Judith Regan has the dirt on Rupert Murdoch and “more than a few Fox executives,” the New York Daily News is reporting. Regan, who was fired last year after trying to publish OJ Simpson’s “If I Did It,” claims to have secret tapes of “juicy” and “explosive” phone calls from her time at NewsCorps’ HarperCollins. Regan is currently suing NewsCorp for wrongful termination and defamation.
After so many broken promises, when we hear Rupert Murdoch news item, juicy and explosive, we expect Rupert Murdoch news item, desiccated and banal, but maybe this will be the one.
In other “news,” Rupe is frustrated with those mercurial Bancrofts because, “they keep changing their mind.”
Regan may out-Fox Rupe [NYDailyNews via Gawker]
Sun Valley: What Murdoch Said, and What He Didn’t [Dealbook]
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Bancroft
Burkle and Greenspan Meet With Dow Jones: Murdoch Meter Doesn’t Flinch
By Dealbreaker
Although a NewsCorp deal will likely may be announced this week, Ron Burkle and Brad Greenspan, two renegade investors no one takes seriously had a meeting with the Dow Jones board yesterday. The pair, who did not present an offer and have few, if any commitments from other investors, want to “buy out only those members of the Bancroft family who wanted to sell,” the New York Times Reports.
The primary Dow Jones union recruited Burkle, who owns the private equity firm Yucaipa Companies, to partner with Greenspan and block Rupert Murdoch’s bid in what seems to be another effort to protect the journal’s editorial independence. The New York Observer details the lunch between Greenspan and a union leader in which the plans were discussed.
“I think it’s clear the family does not want to sell to Rupert Murdoch. If they did, they would have taken the $5 billion a long time ago. We would much rather have the family continue its stewardship of this company. I believe that working with Burkle and a number of other people, we have alternatives, if the family wants an alternative,” union leader Steve Yount tells the Observer.
But does this make any sense? Does the addition of Burkle make Greenspan’s half-baked bid less crazy or twice as crazy? We would side with the latter, but don’t take our word for it. Take the word of the former chief executive of Dow Jones, Peter Kann, who the Journal describes as “outspoken in his support for the independence of Dow Jones”
“If the family is going to sell I see no point in pursuing industrial conglomerates, Internet entrepreneurs, supermarket magnates and real-estate developers. None know anything at all about journalism. As to Mr. Murdoch, at least he loves newspapers, presumably would invest in the WSJ and Dow Jones, and would seem to have little incentive to tarnish a trophy he has coveted for so long,” Kahn says in today’s Journal story on the item.
Also, see Gary Weiss for what happens when amateur investors buy newspapers. A serious question for Dow Jones employees who may be invited to join some sort of leveraged Employee Stock Ownership Plan rival buyout bid is whether they want to spend part of their paycheck buying the company from the bondholders for the next decade or so. Because that’s the best-case proposal from a Burkle-Greenspan partnership.
Shares of Dow Jones traded slightly lower today, bringing our technical arbitrage measurement down to 90%. But we’re exercising our own editorial independence here and refusing to move the meter. It remains unchanged at 95%.
Burkle and Greenspan Gather Journal Kiddies for ESOP Fable [New York Observer]
Dow Jones Hears Alternative Proposals [Wall Street Journal]
2 Investors Discuss Partial Purchase With Dow Jones Board [New York Times]
When it came out that Rupert Murdoch and Dow Jones had agreed on a way to preserve the Wall Street Journal’s editorial independence, we naively assumed that a compromise had been reached. In fact, the “agreement” consists of exactly what Murdoch wanted and more, the New York Times is reporting.
The details have not been finalized, but as it stands, News Corp will have the exclusive power to hire and fire top editors at the Journal. In addition, and this is the shocking part, the board of editors the Bancrofts want established as shield against Murdoch’s influence will not have veto power over any News Corp editorial appointees. Even the similar board at the Times of London, which the Bancrofts have cited as an example of too much News Corp influence, has this veto.
The Bancrofts still haven’t seen the agreement. Based on their past behavior, they probably won’t be happy about it.
In related news, some Wall Street Journal staffers are apparently taking half the day off work today to protest Murdoch’s bid. According to a Newspaper Guild statement from this morning,
“The Wall Street Journal’s long tradition of independence, which has been the hallmark of our news coverage for decades, is threatened today. We, along with hundreds of other Dow Jones employees represented by the Independent Association of Publishers’ Employees, want to demonstrate our conviction that the Journal’s editorial integrity depends on an owner committed to journalistic independence.”
Nothing like a good “don’t go back” lunch break to show you are made of stern stuff.
Also, MySpace founder Brad Greenspan’s weird effort to block Murdoch by buying 25% of Dow Jones is apparently still happening. “We have put out a proposal to the family and the board, and I think they’re looking at it with great interest. We plan to meet with the board later this week – that’s a new development,” he told CNBC yesterday.
Dow Jones stock dropped slightly with the news, most likely out of fear that the Bancrofts won’t like the agreement the board reached with Murdoch. The meter has slipped 5%.
Tentative Dow Jones Sale Pact Said to Give Murdoch Power to Hire and Fire at The Journal [NYT]
A statement from Wall Street Journal reporters [Romenesko]
Dow Jones Bidder to Meet Board; News Corp. Deal Reached [CNBC]
After yesterday’s announcement that an “agreement” had been reached to secure the editorial independence of the Wall Street Journal, Rupert Murdoch said that he would not raise his current, $5bn bid for Dow Jones. “Everything is done. We are just waiting for a final approval of the Bancroft family. The final approval is in the next two, three week’s time or not at all,” Murdoch said today from Poland.
This, of course, doesn’t mean a modest bid increase is out of the question. One can hardly expect a perspicacious dealmaker like Rupe to tell Reuters, “I probably will up the offer, I just want to see if the Bancrofts will take the five billion first.”
It also seems that yesterday’s agreement on the Journal may have been prematurely announced. Parts of the deal remain, “sketchy or not yet written,” the New York Times is reporting. “The nuts and bolts are there, but not all the details,” a source involved in the negotiations said. Only a few of the Bancrofts, who have ultimate veto power over the deal, have been briefed on the still-unreleased Dow-NewsCorp. agreement.
Dow Jones Accord In Place, But Incomplete [Dealbook]
Murdoch: No plans to raise Dow Jones bid [Reuters]
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Bancroft
(Update) Breaking News: Rupert Murdoch and Dow Jones Agree On WSJ Editorial Structure
By DealbreakerNews Corp. and Dow Jones have agreed on a plan to protect the editorial independence of the Wall Street Journal, Reuters is reporting. The Bancroft family, which controls 64% of Dow Jones shares, is currently being briefed on the agreement and has yet to approve.
The Financial Times reported last night that a Dow-Murdoch deal was close at hand after contentious bargaining by both sides yesterday and over the weekend.
The content of the agreement has not been released, but will likely fall somewhere between Murdoch’s arrangement with the Times of London and the initial proposal from Dow Jones that sought to create an autonomous, Bancroft-appointed board to hire the Journal’s publisher, executive editors and wire chiefs.
If this agreement is accepted by the Bancrofts, the talks will likely move to pricing. Currently, Murdoch is offering $60 per share ($5bn) with conflicting reports as to his willingness to increase the offer. If NewsCorp. and the Bancrofts can agree, it is likely that a deal will not be announced until at least next week.
Dow Jones, News Corp. Agree on Editorial Structure: Reuters [Reuters via CNBC]
Murdoch makes progress on WSJ [Financial Times]
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Dow
Breaking News: Rupert Murdoch and Dow Jones Agree On WSJ Editorial Structure
By DealbreakerCNBC and the Financial Times are reporting, more to come.
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Dow
Brinksmanship In News Corp’s Talks With Dow Jones
Also, The New York Times Has Mixed Feelings For Murdoch
By Dealbreaker
The New York Times published its 3800-word investigation of Rupert Murdoch’s NewsCorp today, but it doesn’t contain any of the dealbreaking revelations we anticipated. In the “Murdochracy,” the Times reports, Murdoch avoids government regulation and generally gets what he wants through the potent cocktail of intimidation, lucrative private contracts for elected officials, campaign contributions and enormous lobbying budgets.
We remain convinced that the Times’ business section would love to see the NewsCorp.-Dow Jones deal go through, if only to watch the Wall Street Journal tabloidicized. Inset into the indignant larger story by the news department, business section reporters Richard Siklos and Andrew Ross Sorkin have a short piece reporting that, after a tempestuous weekend, the Dow Jones deal is closer to realization than ever before. The news section seems to think Murdoch is a manipulative, dangerous man while the business section just likes watching their rivals at the Journal sweat.
Yesterday, Murdoch drafted a letter withdrawing NewsCorp from negotiations after he found the Dow Jones proposal to ensure the Journal’s editorial independence “insulting,” the Journal reported. The letter was never sent and talks returned to normal late last night. Even if Dow Jones and NewsCorp can agree on the governance of the Journal, the Bancrofts still need to settle on a price, meaning these negotiations could go push into July. Bankers we spoke to said it was unlikely that Murdoch would increase his offer.
We’re dialing the Murdoch Meter back five points after the tumultuous weekend.
Murdoch Reaches Out for Even More [New York Times]
Dow Jones Deal Talks Intensify [Wall Street Journal]
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