Gillian Wee of Bloomberg News writes Thursday that News Corp. CEO Rupert Murdoch may need as much as three years to show his shareholders that the purchase of Dow Jones & Co., the parent of The Wall Street Journal, Barron’s and Marketwatch, was worth more than $5 billion.
Wee wrote, “By that time, Murdoch’s News Corp. should be able to double Dow Jones’s pretax cash flow to $600 million, giving it a 12 percent return on the purchase, said Larry Haverty, a fund manager at Rye, New York-based Gamco Investors Inc. Dow Jones may start adding to News Corp.’s profit in 2009 following investments next year, said Laura Martin, an analyst at Soleil Securities in San Marino, California.
“‘It’s not a quick strategy,’ said Haverty, who helps manage Gamco’s $30 billion in assets, including $308.1 million of News Corp. shares as of Sept. 30. ‘Where he’s going, we’re very comfortable with it. It’s just going to take three years.’
“More than 50 percent of shareholders approved the deal ahead of the meeting, the Wall Street Journal reported yesterday, citing people familiar with a proxy-vote count. The purchase should be completed today shortly after the shareholder vote, News Corp. spokeswoman Teri Everett said.”
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