Investing in Newspapers: Murdoch Bid a Boon for the Industry
By Ian L. Cooper
News that newspaper readership slipped 2.1% certainly wasn’t a catalyst for newspaper stocks, but news of Murdoch’s $60 per share cash offer for Dow Jones is certainty helping to catapult beleaguered newspaper stocks. Yep, on May 1, revolutionary day, media mogul Rupert Murdoch made his bid for Dow Jones, thereby declaring his beliefs in a newspaper stock bottom.
If successful, he’ll enhance his portfolio of media ownership, strengthen plans to introduce a business news channel, and become a real threat to CNBC.
The question now – can the Bancroft family reject such an offer? Sure it can, but it’ll surely argue over allowing such an offer to slip away.
All we know is this: The board of directors and trustees of the Bancroft family have announced they are in receipt of the offer. But, there are no assurances of a transaction. If the family’s plan is to retain control of the company, they can let it slip away. But it’s hard to ignore a 65% premium, or the possibility of competing bids that could come from the New York Times, even Bloomberg, or General Electric.
If General Electric doesn’t make a move, I’ll be surprised given the competitive threat to CNBC.
Take care,
Ian L. Cooper, Editor, Early Alert Trader
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