News Corp. made an unsolicited $5 billion (Rs20,500 crore) takeover offer for Dow Jones & Co., parent company of The Wall Street Journal.
The offer could set off a bidding war for Dow Jones, which is the owner of one of the most storied newspaper franchises in the world.
Possible rival suitors include the Washington Post Co., the New York Times Co. and possibly even Bloomberg LP.
Dow Jones said in a statement that its board, and members of the Bancroft family, the company’s controlling shareholder, are “evaluating the proposal.”
The $60-a-share offer is roughly 67% above Dow Jones’s recent market value. In early trading on the New York Stock Exchange, Dow Jones shares jumped $20.95 to $57.28. The last time the shares traded above $57 was five years ago, in 2002.
The bid comes at a critical time in the US newspaper industry, when defections of readers and advertisers to the Internet has sharply eroded newspaper profits and raised doubts about the industry’s long-term future.
In the past year, two newspaper empires, Knight Ridder Inc. and Tribune Co., have put themselves on the market after pressure from restive shareholders. Knight Ridder ended up being bought by McClatchy Co., while Tribune decided to go private in an $8.2 billion transaction backed by real-estate magnate Sam Zell.
The mere possibility that News Corp. owner Rupert Murdoch could get control of The Wall Street Journal is almost certain to spark a firestorm of controversy.
Critics are likely to see his potential acquisition of one of America’s most influential newspapers as an unacceptable extension of his already formidable media sway.
News Corp.’s only US newspaper property now is the New York Post, but the company owns the Fox broadcast network and Fox News Channel as well as several entertainment cable channels and the 20th Century Fox film studio.
The company is a major newspaper publisher in Britain and Australia, however.
In India, News Corp. owns Star India, which runs all Star television channels other than Star News and the website, Indya.com.
The Wall Street Journal has an exclusive content partnership in India with Mint.