MAY DAY, MAY DAY WE ARE UNDER ATTACK

Dow Jones (DJ) just put out a press release stating they recieved an "Unsolicited acquisition proposal from News Corporation (NEWS). Thw WSJ reports it is a $5B takeover bid, and DJ was trading over $55 — up $19 — a 52% one day gain.

I rec’d media plays Dow Jones and Disney a few months ago on Bloomberg TV, but I had no clue that it was takeover bait. 

This is potentially very bad news for CNBC — they are a joint venture of both NBC and Dow Jones. I would think that some senior people at CNBC are asking pleading with GE execs to make a run at Dow Jones — if for no other reason than to keep the WSJ out of Rupert Murdoch’s hands.

Once GE owns Dow Jones, they could then spin out their entire media
group as NBC Universal — including NBC, CNBC, WSJ, Barron’s,
Marketwatch, etc. at a much higher valuation. If CBS has a $22B market cap, well then the entire NBC/WSJ/DJ/CNBC package should be in the $10-20B range, depending upon the total revenue range of all the media properties included.

In addition to GE, other potential bidders the Washington Post, the New York Times, and Bloomberg.

Murdoch’s obvious interest is using the Dow Jones infrastructure to power the News Corp Business channel which will be competing with CNBC sometime in the coming year. Once he owns Dow Jones, I would expect that CNBC as a joint WSJ/NBC product would be going bye-bye.

UPDATE 2 May 1,2007 3:04 pm

It may turned out that this was a very badly kept secret: Deal Journal notes:

"Monday, more than 4,300 Dow Jones call options changed hands,
bringing the total for the month to a little more than 10,000 contracts. That compares with about 7,000 over the first three months of the year.

Lucky
guess? Maybe. Trading yesterday was heaviest in the contracts that
confer the right to buy the stock at $45 by late September, suggesting
that any insider knowledge of the timing an offer was, at the very
least, sketchy. If there were shenanigans, it would fit a pattern many
of the big deals in the takeover boom have followed."
- Deal Journal: Strange Trading in DJ Options

UPDATE May 1,2007 12:34 pm

I see Paul Kedrosky agrees with the idea of GE getting involved . . .

>

Sources:
News Corp. Offers $60 a Share In Unsolicited Bid for Dow Jones
MARTIN PEERS
WSJ, May 1, 2007 12:17 p.m.
http://online.wsj.com/article/SB117803255991188252.html

Dow Jones Confirms Unsolicited Acquisition Proposal from News Corp
Dow Jones (May 1, 2007)
http://www.dowjones.com/Pressroom/PressReleases/Other/US/2007/0501_US_DowJones_625.htm

Category: Financial Press

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

29 Responses to “Will GE Rescue Dow Jones?”

  1. KP says:

    CNBC has been behaving like a FOX channel, might as well make it official.

  2. GerryL says:

    “I rec’d media plays Dow Jones and Disney a few months ago on Bloomberg TV, but I had no clue that it was takeover bait.”

    I didnt understand this statement. Does anybody know what it means?

  3. S says:

    Wouldn’t it be odd if the joint venture agreement didn’t give NBC/GE a right of first refusal?

  4. John says:

    Gerry,

    It means he recommended buying DJ, but not because he thought it would get a bid like this.

  5. GerryL says:

    Thanks John. I thought Rec’d was an abbreviation for received which didnt make sense in this context. It makes sense as recommended

  6. GerryL says:

    I wonder what CNBC would do if News Corp wins Dow Jones. I believe that CNBC and Dow Jones have an agreement through 2012. It obviously wouldnt work if Murdoch owns Dow Jones. However, I dont think CNBC would just walk away and let Murdoch use Dow Jones on his new business cable channel.

  7. J. Bridges says:

    A few random thoughts on the Murdoch threat to CNBC:

    I. If a formidable competitor means an end to the infotainment, air-headed market cheerleading we get on CNBC 80% of the time, that will be a real tragedy (clarification: BR’s time on CNBC is part of the other 20%).

    II. Regarding the editorial philosophy of a Fox-B channel, it will be lamentable. Let’s just say they won’t be hanging a picture of Ida Tarbell behind the anchor desk. Fine. No muckraking; they have to have advertisers, afterall. Murdoch has commented that he finds current B-Tv too “controversial.” So, it looks like they’ll have an excellent staff of opposition researchers digging through Greenpeace rubbish bins.

    III. Could Fox possibly create their own version of Jim Cramer? Excuse me, I just retched, but now I’m better. Maybe Don Luskin would get his own show…now I really feel nauseous.

    While CNBC is far from perfect, I do hope they are able to survive w/ their DJ deal.

  8. Mark says:

    The WSJ is a fantastic newspaper. The company obviously pours a lot of money into it. I can’t see the quality improving under Murdoch…

  9. V L says:

    News Corp. and Dow Jones would be a much better match together – both are more conservative and mostly without the spin – “we report, you decide” type of reporting. (In contrast to opinionated CNBC spin meisters)

    Murdoch has been trying to expand into this lucrative segment of business for some time now without any success (Current Fox-B is a joke)

  10. Fred says:

    I find it deliciously ironic.

  11. worth says:

    CNBC = joint Dow/NBC, right? If the driver of its success is the personalities, NBC could keep them and chug along. If the driver is the Dow infrastructure, Rupert would just plug in other personalities and it would chug right along. Guess it depends who really owns the “talent” contracts, Dow or NBC? If it’s Dow, then heck, why doesn’t Rupert just roll out the whole production as is and call it DFOX (Dow Fox) instead of CNBC and have that be his much ballyhooed new b-news show instead of reinventing the wheel/fixing what ain’t broke? All he needs to do to FOX-ify it is borrow and add Colbert’s soaring, screaming eagle graphic to the start of it (did you like how I also paid homage to Stephen C. with my multiple metaphors???)

  12. Momo Fader says:

    This is the reason that the markets caught a bid this afternoon? You have to be shitting me.

    Rupert Murdoch is an ass, and if would be a real shame if the WSJ fell into his hands. That said, I think that the Financial Times is a much better paper, if you don’t want all the USA-focus.

    As for CNBC, maybe this will shake them up a little. They are not a news station though. They rarely are able to deal with interruptions and/or exceptions to their programming. Everything has its slot, and nothing can deviate from the plan. Most of the “reporting” is puff as. I would say the interesting/original percentage of CNBC that Barry R. makes up (with Peter Schiff, Art Cashin, Nouriel Roubini) maybe at 10%. I only turn it on anymore on days like today when I can’t immediately figure out what gave the markets a bid.

    CNBC would go a long way towards improving their image in my opinon if they ditched the daft bimbos and gave us more crusty old floor trader types. I’m sure Murdoch’s vision is even heavier on the bimbosity and lighter on the boat rocking, so maybe I shouldn’t complain.

  13. Robert Cote says:

    If those call options are honored the markets will never recover from the ensuing uproar over the scandal. Full lawyer employment act of 2007.

  14. Estragon says:

    Just a thought, but why is it necessarily the case that GE bids for DJ. Isn’t it at least possible that GE just throws CNBC overboard?

  15. Fred says:

    Now CNBC is showing RATS again…’nuff said!

  16. Emmanuel says:

    I sure hope CNBC is done away with. CNBC is to business journalism what “professional wrestling” is to sports.

  17. Rick says:

    B.R. G.E. has had a bid for over a week now, goodluck keeping a secret on W.S. As for your “Bling” reference, Hunter S. Thompson and P.J. O’Rourke have helped Whitey remain kewl for sometime now brotha…… Its only the MSM; thank goodness for b’vision’s top-notch ad-spots and ticker (i.e. my cockatiel has achieved three octaves thanks to the likes of banks, cars, and other drek-goodies pitched).

    As for this D. Jones/R.M sillyness, God help us all if Jeff stoops down to THERE level noting I have been a shareholder since that last dummydance back in Fall ’02!

  18. Bob A says:

    Better yet… GE should team up with Proctor & Gamble, take out News Corp, put the stinkin old buzzard out to pasture and reprogram Fox News as a 24/7 Soap Opera channel.

  19. Frankie says:

    Bring it on Rupert…Fox has MUCH hotter chicks than CNBC. Put Money Honey out to pasture.

  20. Mousefinger says:

    Bleh. CNBC is for old people.

    I hate it and so does many people my age (probably way young than most people here and most that “watch” CNBC). The crusty old people on Wordern’s TCNET (TeleCharts “chat rooms”) sit around and gawk at CNBC all day, ripping it apart, ripping the guests, ripping the hosts, yet strangely watching it ALL DAY AND HATING IT!!

    I don’t understand the old in my profession and I don’t care if CNBC is pulled off life support tomorrow and replaced with C-SPAN reruns.

  21. Greg0658 says:

    “Your Move All Good People” by Yes comes to mind. Aussie NewsCorp is being assisted in capturing the Wall Street Journal because of the down dollar. Playing this game is transfering real wealth folks.

    Wall Street was invented to push a money pile to an inventor – this VegasWallStreet has Got To Go.

    Health Care, Oil/Energy and Phone/Cable/Water/Electric businesses need to be more socialized. And money loaning probably too.

    Start working for a living, and gamble in Vegas with your labor dollars.

  22. wunsacon says:

    The WSJ and Barrons are good sources of info. I accidentally let my subscription lapse but probably won’t renew if Murdoch takes over.

    Despite being bearish on the real economy, I remain long in the nominally-priced market in certain areas. But, I want to keep reading NEWS; not cheerleader and administration talking points that might lead me to take even more risk than I’m taking now.

  23. Granville says:

    nice call barry. now if dis could only get a bid…

  24. Winston Munn says:

    My God, someone stop this madness. It’s bad enough Barry has to share a stage with Luskin, but a Barry Ritholtz/Bill O’Reilly debate?

  25. blam says:

    Thank God we don’t have any more Powells’ dismantling the American experience for the good of their monied handlers.

    Allowing pieces of garbage like Fox news to collect and control our valuable independent news organizations and outlets has put this country at risk.

    All the kings horses and all the kings men will not be able to put Humpty back together, again. Bill O’Rielly and Shaun Hannity for all eternity. Maybe I have died and gone to hell. Please may I have more GE pablum, sir.

    Wait, it’s just a bad dream. I better take a reality check…. Oh my God it’s true. They actually did elect George W Bush president …. twice. Ahhhhhhhhhhh !!!!!

  26. Winston Munn says:

    World ex-reality = The World According to Paulsen.

    The foreclosure and deliquency rates ex-subprime and Alt-A loans are the lowest in decades.

    America ex-90% of the population, is still the most prosperous country on earth.

  27. I can’t stand the parade on CNBC…Good for Fox B-Channel

  28. Barron’s Yahoo?

    I hadn’t really noticed this prior, but some of the subscription only Barron’s columns are showing up in Yahoo! Finance. The two columns I mentioned over the weekend — Up Down Wall Street’s Bubble 2.0 , andThe Trader column’s Even the Bulls Aren’t So …

  29. Robert H. says:

    This Orwellian homogenization of the newsertainment industrial complex serves to effectively abrogate the right of freedom of the press for anyone who gets their newsertainment primarily or exclusively from TV. We are disabused of nothing. Lindsay Lohan and The Sopranos serve as the top stories on newscasts (Well, The Sopranos I understand). What? Fire Brian Williams. Let Mary Hart read the news. It’s all the same thing anyway. God forbid the Internet is ever reduced to the same monological drivel. There I can at least choose my content instead of being proselytized by the man. Let the odious, onanastic Big Brother try to get in Paris Hilton’s pants on his own time. But I may be overreacting.