Just say no defense

03May07

It is hard to imagine that the News Corp. (NWS) bid for Dow Jones (DJ) is over. The Bancroft family is apparently going to assume a “just say no” posture towards Rupert Murdoch’s bid for their Dow Jones shares. The question is whether this non-response will be sufficient for all wings of the family and the non-family shareholders.

Sarah Ellison and Dennis K. Berman at WSJ.com succinctly note what we are in store for:

The company’s decision — and the slim margin of the vote — sets the stage for a complicated clash of interests and allegiances, which increases potential tensions between the Bancrofts, Dow Jones’s board of directors and other shareholders eager to sell the company.

Andrew Ross Sorkin at the New York Times notes how the market continues to believe a deal is still likely since Dow Jones’ stock price has not budged on the board’s announcement.

Felix Salmon at Market Movers notes how the Bancroft family’s shares are held (trust or individually) may affect the eventual outcome.

Nat Worden at TheStreet.com notes how the company’s non-response will “raise hackles” on Wall Street where shareholders will be unwilling to see their shares sink back on a non-deal.

Joe Weisenthal at the Stalwart thinks that if nothing else this bid has put the spotlight back on the launch of the Fox Business Channel.

DealBook looks at what the Murdoch might mean for a Wall Street Journal competitor, the Financial Times and its owner Pearson.

John Carney at DealBreaker.com notes speculation that any other bidders will emerge to challenge Murdoch.

Another constituency that may want to see a deal done is Dow Jones executives who could see a big increase in wealth under a transaction, notes Eric Dash at the New York Times.

We would tend to agree with Paul Kedrosky at Infectious Greed on the prospect for a family split and that a higher bid just might get a deal done.

In conclusion it seems difficult to imagine how Dow Jones can simply “say no” to the Murdoch bid without some sort of substantive response. We have yet to hear a proposal that gets Dow Jones stock up to $60 absent a combination. In this day and age leaving billions of dollars on the table (in the cold light of day) is increasingly difficult.

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