New York – Rupert Murdoch’s News Corp. may be preparing to walk away from a $5 billion bid for Dow Jones & Co. after trying without success to win support from the controlling Bancroft family, Pali Research analysts said.
News Corp. “is increasingly frustrated” with the failure of family members to respond to overtures by Murdoch, Pali’s Richard Greenfield and Mark Smaldon wrote Monday in a note to investors. Directors of New York-based Dow Jones took no action after Bancroft members said a majority of their shareholder votes would reject the offer of $60 a share.
News Corp., Greenfield and Smaldon predicted, will rescind its offer for the publisher of The Wall Street Journal in “the next couple of weeks and leave Dow Jones to fend for itself.” Dow Jones is not a “must-have” for News Corp., and the New York-based company isn’t expected to raise its bid to pressure the family to accept it, they said.
“It is ‘silly’ for News Corp. to simply stand around endlessly waiting for the Bancroft family to change their minds,” Greenfield and Smaldon wrote. Greenfield, co-head of London-and-New York-based Pali Capital Inc.’s Pali Research, rates News Corp. shares “buy.”
News Corp. spokesman Andrew Butcher had no comment on the report. Dow Jones spokesman Howard Hoffman also declined to comment.
Shares of Dow Jones, owner of Dow Jones Newswires and Barron’s, fell $1.85, 3.5 percent, to $51.10 at 4:01 p.m. in New York Stock Exchange composite trading. News Corp.’s Class A shares gained 28 cents, 1.3 percent, to $22.33.
Pali’s analysis may be premature, said Michael Chren, whose Allegiant Large Cap Value fund held about 436,000 shares of Dow Jones as of April. Murdoch hasn’t exhausted efforts to persuade more Bancroft members to support News Corp.’s offer, he said.
