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Dow Jones shares soar after News Corp. makes unsolicited offer to buy co. for $5 billion

Dow Jones shares soar after News Corp. makes unsolicited offer to buy co. for $5 billion

Shares of Dow Jones & Co. raced to a fresh 52-week high Tuesday after Rupert Murdoch's News Corp. made an unsolicited offer to purchase the company for $5 billion (euro3.68 billion).
Dow Jones issued a brief statement confirming that its board had received the proposal from News Corp. to buy the company at $60 (euro44.10) a share, either in cash or a combination of cash and News Corp. stock.
Dow Jones, the publisher of The Wall Street Journal, Barron's and other newspapers, along with its namesake business newswires and the online service MarketWatch, is controlled by the Bancroft family through a special class of shares and cannot be taken over without their consent. The company said in its statement its board and members of the Bancroft family were evaluating the offer, and there was no assurance it would lead to a transaction.
Analyst Steven Barlow of Prudential Equity Group said in a client note that the News Corp. offer makes sense.
"We think News Corp. is a logical bidder and has been since it announced its desire to start Fox Business News. Dow Jones does have an agreement with CNBC but it only takes money to extract themselves from it," he wrote.
If a deal comes to fruition, Barlow sees News Corp. divesting the Ottaway group community newspapers and keeping electronic products near term.
Alexia Quadrani, an analyst with Bear Stearns, is leaning toward Dow Jones accepting the bid.
"While we do not believe the family was looking to sell the company and does have concerns about maintaining journalistic integrity, this offer may be hard to refuse," she said in a client note.
Shares of Dow Jones jumped $19.22 (euro14.13), or 52.9 percent, to $55.55 (euro40.83) in afternoon trading on the New York Stock Exchange. The stock hit $57.88 (euro42.54) shortly after the news broke, its highest point since April 15, 2002, and the first time it has traded over $50 (euro36.75) in more than three years.


Updated : 2021-05-12 00:44 GMT+08:00