Bancrofts will sell Dow Jones, but not to Murdoch

Markos Kaminis writes on the SeekingAlpha web site that he believes that the Bancrofts will sell Dow Jones & Co.,the parent of The Wall Street Journal, but not to News Corp. CEO Rupert Murdoch.

Kaminis wrote, “When you compete against someone, whether in media or in total wealth, like for instance Rupert Murdoch, then selling to that competitor can leave a bitter taste. I’m totally guessing here, since that kind of wealth is just something I pass on my way to Central Park. Still, this is where art impacts the science of the deal. So, while Greenspan’s first offer may not quite seal the deal, he may have the winning cards in his hand. However, I continue to believe a new suitor is very likely to come to fore, which is a good thing for valuation.

“This is a staple American asset for sale, and if the crème of society is willing to pay up for art and antiques, then they’re willing to pay up for Dow Jones. News Corps.’ best offer on the table at $60 is probably not even competitive with the Greenspan offer, since the Bancrofts would not have to give up control. Still, on a what seems like daily basis, new suitors are coming to the table, despite the withdrawal of interest from General Electric (GE) and Pearson Plc. We believe General Electric offers a nice fit for DJ, with its CNBC brand, and GE is probably not out of the running quite yet. Also, LA billionaire Ron Burkle is rumored to be assembling a group to buy the company, which may include an employee-based interest. In the wings, the Philadelphia Inquirer’s owner, Philadelphia Media Holdings along with its partners may still emerge with a deal. It seems clear to us that Murdoch or someone is going to have to raise the stakes if they really want Dow Jones.

“In times like these, valuation takes on a different flavor. Investors look at the asset and the brand, and in Greenspan’s view, the value that can be created through better online leveraging of the DJ brands. Just because Internet is replacing hard copy reading, does not mean the Wall Street Journal is worth the same as just a regular blog. Though it certainly improves bloggers’ distribution competitiveness. You see what I mean, there are respected brands there in Barron’s and the Journal for instance, that are always going to be viewed as legitimate sources of financial news and opinion. You don’t lose that kind of value overnight to the blogs of the world, however excellent the content may be (cheap plug).”

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