Magazine article Editor & Publisher

Editorial: Another Dubious Deal

Magazine article Editor & Publisher

Editorial: Another Dubious Deal

Article excerpt

Here we go again. Another squirrelly takeover proposal plops unbidden on the doorstep of an iconic American newspaper company, and though nobody thinks any good will come of it, there's yet again a feeling that one way or another a change in ownership is inevitable.

Has it really only been 19 months since a single letter from Bruce Sherman harrumphing about the stock price of Knight Ridder Inc. set off this disastrous domino effect in the newspaper industry? Deal upon deal, valuations and journalistic reputations tumble as an assortment of billionaires with expertise in spec home construction, real estate, grocery stores, and the movies -- joined very occasionally by people who actually know the newspaper business -- engage in auctions where the object seems to be to race the other guy to the lowest EBITDA multiple.

Now comes News Corp.'s Rupert Murdoch and his takeover proposal for Dow Jones & Co. Two things you can say about Rupert: He knows newspapers, and he's no cheapskate. His $5 billion bid puts a premium of some 67% on what had been the going price for stock in Dow Jones, publisher of The Wall Street Journal, and that rare newspaper company that's managed to monetize the Web.

The Bancroft family -- or at least those among them who represent a bare majority of Dow Jones voting stock -- say they're opposed to handing the company over to Murdoch. And maybe they'll succeed in staving off this unwanted suitor where such storied names as the Cowles, Binghams, and Lowes could not. …

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