Murdoch bid boosts newspaper biz
EmptyNEW YORK -- Rupert Murdoch provided a boost to the long-ailing newspaper industry Tuesday as an unsolicited $5 billion cash bid by his News Corp. for Dow Jones & Co. drove key sector stocks higher.
Newspaper industry investors and observers seemed to see the Murdoch play as a potential sign that the sector has finally reached a trough.
Trading in Dow Jones shares was temporarily halted Tuesday as the news of the bid started spreading, but it was up nearly 60% before that.Shares of newspaper giant Gannett Co. Inc. were up 5.9% at $60.44 shortly after noon EDT, close to their 52-week high of $63.50.
Belo Corp. shares, meanwhile, traded at $19.90, up 3.3%, after setting a new year-high of $20.22 earlier in the session. Belo led Tuesday's gainers on The Hollywood Reporter's Showbiz 50 stock index. McClatchy's shares were up 4.9% at $30.31. And Media General's stock was up 4.6% at $38.41.
The takeover play could give News Corp. control over the Wall Street Journal and Dow Jones' financial news service that would make the upcoming Fox Business Channel an even more formidable competitor to CNBC, which has a long-term partnership with Dow Jones.
Dow Jones confirmed the $60 a share offer Tuesday and said that the Bancroft family, which holds 62% of the company's shares, was evaluating the offer along with the company's board of directors. It said it had received "an unsolicited proposal from News Corp. to acquire all of the outstanding shares of Dow Jones common stock and Class B common stock for $60 per share in cash, or in a combination of cash and News Corp. securities."A News Corp. spokesman was not available for comment.
News Corp. chairman and CEO Murdoch has long coveted the Journal and its editorial page, which is one of the most influential in the country. Murdoch already owns a stable of newspapers in the U.S. and elsewhere around the world.
Appearing at the McGraw-Hill's Media Summit New York in February, Murdoch was asked about his long-rumored interest in Dow Jones, saying: "I'm cooling on it." He added: "I don't think we'll ever get it, and they'll sell."
He said he didn't expect that the company would be put up for sale any time soon and suggested that a takeover might be a hard sell to shareholders given the sluggish newspaper business.
He also criticized Dow Jones' flagship Wall Street Journal, saying it has been focusing on putting most breaking news on the Internet and running more analytical pieces in print, arguing this has cost the paper some of its urgency. "I'd do something different to what they've done," he said.
However, Murdoch lauded the strong brand of the Wall Street Journal and said it has "the opportunity to go after the New York Times nationally."