Rupert Murdoch's News Corp has launched a $5 billion (€3.67 billion) bid for Dow Jones, owner of the Wall Street Journal, in a move that would give the media group control of one of the world's most influential newspapers and bolster its plans to launch a US cable business channel and extend its online reach.
Mr Murdoch made the surprise, all-cash $60-a-share offer in a letter sent to the Dow Jones board two weeks ago, according to people familiar with the matter. News Corp confirmed in a brief statement that it had made a "friendly" offer.
The report of the offer shortly before lunch hour in New York yesterday spurred a 57 per cent jump in Dow Jones shares to $57.28 before authorities halted trading.
In a statement yesterday, Dow Jones confirmed it had received Mr Murdoch's offer, and said the Bancroft family, which controls its voting shares, was "evaluating the proposal".
People close to the matter said the Bancrofts, who have controlled the company for nearly 80 years, had been polled about the News Corp proposal and had not "dismissed it out of hand".
The offer raised the prospect that one of the world's largest and most influential publishing empires would now be up for grabs, with speculation yesterday that other bidders would enter the fray, including rival newspaper groups and private equity firms.
It also offered another sign of upheaval in the newspaper industry, at a time when readers and advertisers are migrating to the internet and long-standing business models have come into question. Last month, Tribune, the second-largest US publisher, was sold for $8.2 billion in deal that took the group private after frustrated shareholders pressed for a restructuring.
Mr Murdoch, who built his empire from a string of family newspapers in Australia, has been outspoken in acknowledging the pressure that the industry faces. Last week he summoned top News Corp executives to his ranch in California for a three-day meeting to map out a survival strategy for the news division in a digital age.
In spite of those challenges, Mr Murdoch has long been keen to add the Wall Street Journalto his media empire.
It would also instantly bolster a new Fox Business Channel that News Corp is planning to launch later this year.
Unlike other US newspapers, the Wall Street Journalcharges for online access to its articles. This strategy has helped the company perform better than many other newspapers in recent months. Still, it has struggled since the bursting of the stock market bubble in 2001.
Like other traditional media companies, Dow Jones has been pushing to expand beyond its print business. In recent years, it has acquired MarketWatch, a financial website, and Factiva, an online news information service.
- (Financial Times service)
