Dow Jones + News Corp. = ?
A $5 billion history making takeover rests in the hands of the Bancroft family. The board of Dow Jones & Co. (DJ), publisher of the Wall Street Journal and Barron's, is prepared to approve a bid from Rupert Murdoch's News Corp. (NWS). The $60 a share offer was first publicly released April 30th, 2007. However, Bloomberg cites that in May of 2007, the Bancroft family was opposed to the deal and that the takeover bid would be pushed aside.
How does one family, the Bancroft family have so much clout? The family has been running Dow Jones & Co. for over 100 years and currently owns 64% of the company. The 35 voting Bancroft family members have also set demands that will be placed in the sales agreement if Murdoch gets his way.
One of the stipulations of the agreement will be a guaranteed protection of the Wall Street Journals editorial independence. The family is concerned that Murdoch will use the Wall Street Journal and Barron's as another instrument to spread his political and business agendas, says Bloomberg.
It will, given Murdoch's publishing history be interesting to see how long he can keep his hands off the Journal and Barrons. Remember this is the same gentleman who bought "The Times" of London. Many Londoners still haven't gotten over that one.
Since early July share prices for Dow Jones & Co have flattened. Speculators are unsure if the Bancroft family will approve the board's decision to accept the News Corp's bid. However the stock is 65% higher than the April 30th close, the day that the offer became public.
How will the share price of News Corp pan out? If the takeover is approved by the Bancroft family will we see a jump in price? The power is in the hands of the Bancrofts, it is just an interesting story to keep in mind.
Entry Date: May 1, 2007
Entry Price: $38.34/share
Exit Date: July 12, 2007
Exit Price: $57.02/share
Gain/Loss: In about two month up $18.68/share. Up 48% since the public announcement.
-Trademarks shown above are held and owned by Dow Jones & Co. and News Corp., respectively-
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