Pearson, the publisher of The Financial Times, is exploring a rival takeover offer for Dow Jones & Company. Pearson has reportedly discussed a joint offer with General Electric and the Hearst Corporation for Dow Jones, suggest reports. However, the initiative has not moved forward beyond preliminary discussions, and an tangible offer for Dow Jones, publisher of The Wall Street Journal, is not expected this time around. Investment bankers are reportedly informally giving advice to the companies, but none of them have been appointed by Pearson to pursue a deal.
In April, the News Corporation, controlled by Rupert Murdoch, had made a $5 billion bid for Dow Jones, which at present, being considered by the company’s controlling family, the Bancrofts. However, negotiation between them has been contentious and inconclusive so far. The family members of Bancrofts have already expressed their apprehension over the deal as they have an aversion to racy journalism and conservative politics of some of the News Corporation’s properties. The family is still of the view that it would rather sell to someone else, but in more than six almost two months since the offer became public knowledge; no other bidder has potentially surfaced.
Pearson, General Electric and Hearst are maintaining a complete silence over the issue as they all declined to confirm or deny any discussion of a Dow Jones purchase. However, media experts are of the view that it makes good judgment for Pearson to look for a larger collaborator for a Dow Jones acquisition, since making an offer on its own would be strenuous for the company. Pearson had 2006 sales of $8.3 billion and had reported $668 million as net income.
The Wall Street Journal reported that Pearson has reached out to Hearst Corp. and General Electric Co., which operates business news television channel CNBC, citing people familiar with the situation. Pearson could offer Dow Jones a strong international presence, which the company now falls short of it. The Financial Times is one of the most important players in business news in Europe, where Dow Jones is relatively extremely weak. A joint venture could also help GE, whose CNBC financial news channel could be threatened by Fox’s planned upcoming business news channel, which is scheduled to be launched later this year. At present, CNBC has a partnership with the Journal in which its reporters and editors appear on air.
The Bancrofts are strongly in favor of protecting the editorial integrity of the Wall Street Journal, Dow Jones’ flagship newspaper, is now a highest priority in agreeing to an agreement. The family has shown apprehension that editorial independence at the Journal and other Dow Jones assets might suffer under Murdoch.
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