Dow Jones & Company, Inc. (NYSE:DJ) shares jumped over 50% today after the company received an unsolicited $5 billion, or $60 per share, bid from
News Corp.
(NYSE:NWS). The move would expand News Corp's reach into business media
with the Wall Street Journal and Dow Jones Newswire. While unsolicited,
News Corp. insisted that the bid was friendly and the company would not
pursue any kind of a hostile takeover of Dow Jones.
It is
obvious that Dow Jones is a company that News Corp. wants badly enough
that it would bid such a high amount to preclude competitors. Dow Jones
investors may be ready for an exit too after the company announced
first-quarter profits that fell 63% after revenue at the Wall Street
Journal declined. Coupled with a slowdown in the print media industry -
which saw newspaper circulation fall 2.1% in six months - the bid
should be welcomed by the company's board of directors. However, we'll
have to wait and see...
News of the unsolicited bid also sent
shares of other newspaper companies up as speculation of consolidation
in the industry took over. Gannett rose 5%, the New York Times rose 5%
and the Washington Post rose nearly 3%. For now, however, this seems
like an isolated incident.
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