If the phrase ‘jumped the shark’ hadn’t long ago done so itself, we might write that the news coverage of News Corp’s bid to buy Dow Jones jumped the shark this morning. The business news media is obsessed with the story—which just happens to be about the business news media. And sometime late last night and early this morning—to the sound of full-color print presses humming and newspaper delivery trucks idling—the coverage of the story really began to plumb the depths of its own navel.
This morning the New York Times delivered the news that—as the headline proclaimed—‘Wall St. Journal Editors Held News of Murdoch Bid.’ (Click here for Joe Weisenthal’s reaction in Opening Bell.) It’s a story that the Times editors viewed as important enough to run on the front page of the business section. So what we end up with is a story in a business section (the Times) about how a business news organization (the Journal) covered an acquisition about a business news organization (also the Journal). And now all the other business news organizations (CNBC, the wire services, DealBreaker) are reporting and commenting on that.
M&A
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Wall Street Journal Pulitzer Prize Winners Encouraged To Oppose Murdoch Bid
By John Carney
The Wall Street Journal’s Pulitzer Prize winners are being courted by a campaign to oppose News Corp’s bid for Dow Jones & Co, according to a source within the newspaper. The prize winning journalists are being asked to sign a letter opposing the bid. It is unclear whether the letter would include signatures from only Pulitzer Prize winners currently working at the Journal, or include the larger group of reporters who won while at the Journal who have since left. In the past ten years, the Journal and its reporters have won over a dozen Pulitzer Prizes.
The letter would resemble those that sometimes appear on matters of public concern signed by leading members of various academic or scientific communities. Recently a group of prominent physicists, including several Nobel laureates, sent a letter to US lawmakers urging measures to restrict the use of nuclear weapons by the United States. The WSJ Pulitzer letter would encourage the board of directors of Dow Jones, or possibly the members of the Bancroft family who control the company through their Class B shares (which have ten times the voting power of ordinary shares), to oppose the bid from News Corp to acquire the company, the source claimed.
It is not clear who is organizing the campaign, and DealBreaker has not yet obtained a copy of the proposed letter. Last week DealBreaker broke the news that Jesse Drucker, a Journal reporter and union representative, was encouraging colleagues to protest the deal by writing letters to three members of the Bancroft family who sit on the board of directors.
A List of the Wall Street Journal’s Pulitzer Prizes [Wall Street Journal]
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Today In MurDow: An Ottaway Outburst, A Shareholder Suit, And A Status Anxiety Theory Of Dow Jones
By John CarneyWe saw a few new twists in the tale of News Corp’s attempt to acquire Dow Jones & Co. over the weekend. The most notable, mentioned in today’s Opening Bell, was the outburst from the Ottaways—whose name nicely conveys their message to Rupert Murdoch to stay “outta the way” of Dow Jones. The Ottaways are the other family in the Dow Jones saga, holding around 6% of the Class B shares and heaps and heaps of the common shares. Since those Class B shares have ten times the voting power of common shares, the Ottaways control around 5.2% of the total voting power of the shareholders.
A different type of shareholder also made her opinion of the deal known. Nora Vides of Ridgefield, N.J.—described by the (News Corp owned) New York Post as a “small shareholder” and by Gawker editor Alex Balk as “a whiny bitch from New Jersey” (probably the ultimate Gawker put down)—filed suit in Manhattan Supreme Court claiming the Bancroft family is “unlawfully” refusing to consider News Corp’s bid.
Maybe we should start a list of who is not suing ABN Amro. This morning Bank of America filed a lawsuit seeking a court order barring ABN from selling it’s Chicago-based LaSalle unit to any other potential buyer or even from negotiating with anyone else, the Wall Street Journal reports.
The Journal explains how this fits in with yesterday’s ruling by a Dutch court halting the sale of La Salle to Bank of America:
The suit follows a ruling Thursday by a Dutch court, ordering ABN to halt the sale of LaSalle until shareholders can vote on it. ABN agreed to the sale to buttress its agreement to be taken over by Britain’s Barclays PLC for $89.9 billion in stock, in what would be the world’s largest banking deal.
The Dutch court’s ruling could benefit a consortium led by Royal Bank of Scotland Group PLC, which is planning to make a competing bid for ABN as well as a rival bid for LaSalle, a key asset that RBC wants.
In addition to seeking an injunction against ABN, the suit claims monetary damages.
A legal expert we spoke with (who requested we not use his name since we won’t pay his fees) said that ABN might welcome the Bank of America suit since it could relieve LaSalle of the duty to keep negotiating with other buyers.
Bank of America Sues ABN Amro [Wall Street Journal]
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Breaking: Wall Street Journal Reporters Urged To Oppose News Corp Bid
By John Carney
Wall Street Journal reporters are orchestrating a campaign to inundate three Dow Jones & Co. board members with letters urging them to “stand firm” in opposing the buyout offer from Rupert Murdoch. The three board members targeted are members of the Bancroft family, which maintains voting control of the company.
“As some of you know, there is a movement afoot to appeal directly, via letter, to each of the Bancroft family members that sit on our board. I am urging you to take part in this.,” Journal staff reporter Jesse Drucker says in an email addressed to dozens of Wall Street Journal staffers last night. “The Bancrofts are under tremendous pressure to accept News Corp’s offer, and that pressure will only become greater in the likely event that Murdoch raises his bid.”
News Corp has made an offer to buy all of the outstanding shares of Dow Jones, which owns the Journal, Barron’s, MarketWatch, Dow Jones newswire and other media properties. Rupert Murdoch is the chief executive of News Corp. DealBreaker reported earlier this week that sentiment in the Journal’s newsrooms was running strongly against the deal. This morning the New York Times reported that there is “opposition against” Rupert Murdoch “among some Journal employees.” A union representing Journal newsroom and other employees issued a statement on Tuesday declaring that “the staff, from top to bottom” opposes the offer, the Times reported.
The three Board members targeted by the letter writing campaign are Leslie Hill, Christopher Bancroft and Elizabeth Steele.
“A short letter addressed to each of the three – make a separate copy for each – urging them to stand firm can only help our cause,” Drucker’s email says.
After the jump, read the full email urging the campaign to influence the board members.
Considering that he told his bosses at Goldman Sachs about the insane money making machine that is asset management years before they did anything about it, and sensed that the Japanese were up to something, re: Pearl Harbor, on December 7– 1935, it’s not surprising to hear what The Crames told Liz Claman yesterday about the Deal of The Century:
Rupert Murdoch called me in 1996 when DJ was in the 40s, higher than it is now, and asked me if he should make a 73 dollar bid. I suggested at the time that family would reject it and that he should go directly to it. Obviously ten years have past, the stock is substantially down, and the company may be fed up.
Of course. Cramer knows about every deal. Way in advance. Eleven years in advance. Jim Cramer is eleven years ahead of all of us. He’s living in 2018 right now. He already knows about SiriusXM buying Clear Channel– at $2/share.
Cramer on News Corp’s Dow Jones Bid [CNBC]
Despite yesterday’s news that holders of a slight majority of the voting power of Dow Jones & Co would vote to reject the bid from Rupert Murdoch, no-one seems convinced that the final chapter in this story has been written. And it hasn’t. The board of directors of Dow Jones met with its investment banking advisors to discuss the News Corp bid and assess the possibility for that a rival bidder would emerge, the Financial Times.
Goldman Sachs, which is advising Dow Jones, was expected to give the full board an update on the News Corp bid.
Goldman bankers were also expected to focus on an assessment of whether other media groups or private equity investors would come forward with a rival bid.
People close to Mr Murdoch said he had not heard back from the Bancrofts on Wednesday about his requests for a meeting in the next two to three weeks.
The talk of rival bids has so far been just speculative. One provocative guess seems to be the publisher of the Financial Times, Pearson. This would be a kind of market jujitsu, with Pearson defying calls that it shed its trophy media asset—the FT— and acquiring another. Various other media companies and private groups have been named as possibilities. Both by Deal Journal and Business Week have produced their own lists of possible suitors.
But one highly experienced mergers and acquisitions specialist we spoke with believes that rival bids are unlikely. News Corp’s initial bid included a huge premium, and valued the company at such an extraordinary earnings multiple, that it seems almost designed to scare away competition. What’s more, it’s not clear that any other media company stands to reap the synergistic benefits that available to News Corp—which is planning on launching a cable business news channel.
“Murdoch doesn’t make a bid like this unless he thinks he’s going to win,” a source familiar with News Corp’s mergers and acquisitions practice told DealBreaker. “He’s not kidding around with this. I’m not sure there are a lot of other folks eager to step into the ring with Rupert and try to grab this thing out of his hands, either.”
Dow Jones board meets bankers [Financial Times]
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