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Dow Jones (Parent of the Wallstreet Journal) to be sold?

News Corp sent an acquisition proposal to Dow Jones bored in a letter two weeks ago. The Bancroft family, which controls the company through its ownership of 62% of its voting stock, is currently deciding on whether it will consider a sale of the company. The Bancrofts have hired advisors to help weigh the offer and it remains unclear as to what they might do. The Bancroft's are not a family that agrees unilaterally. The controlling voting stake it held by as many as 20 separate members of the Bancrof family.

The offer has not been rejected; Yet. If Dow Jones directors believe there is enough support from the family to consider a sale, it is likely to begin the process to do just that.

Rupert Murdoch, the owner of News Corp who has built his company into a media empire extending far beyond its roots in the newspaper business, has made it known that he has a deep desire to acquire Dow Jones and its prized property, The Wall Street Journal. Later this year News Corp is expected to start a business news channel to compete with CNBC, MSNBC, CNN, etc.; the addition of Dow Jones would definitely help those efforts. CNBC currently has a partnership with Dow Jones that lasts to the year 2012.

The offer of $60 per share is 50% above Dow Jones 52 week high. This is a 5 billion dollar purchase. Today, after the introduction of this news, Dow Jones stock shot up $20 which translates to an increase of 55% in a single day.

Many News Corp shareholders believe Mr. Murdoch is simmply empire building and do not share his same views. This not the first offer for Dow Jones by Rupert Murdoch as some years ago he made this same interest in Dow Jones visible to the Bancroft family. However, the Bancroft family have long cherished their controlling share in their company.

If Dow Jones is put up for sale, many other bidders will enter the rings. Other bidders might include private equity firms, Bloomberg, and many others.

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