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CNBC's David Faber Reports Newscorp Made Unsolicited $60 a Share all Cash Offer for Dow Jones (Transcript Included)

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CNBC EXLUSIVE: CNBC's David Faber reports that Newscorp, the media company controlled by Rubert Murdoch has made an unsolicited $60 a share all cash offer for Dow Jones, the publisher of The Wall Street Journal. The offer has not been rejected.

DATE: Tuesday, May 1st
NETWORK: CNBC
PROGRAM:Morning Call
TIME: 11:10 am ET

Full transcript below. All references must be sourced to CNBC.

NEWSCORP, THE GIANT MEDIA COMPANY CONTROLLED BY RUPERT MURDOCH, HAS MADE AN UNSOLICTED $60 A SHARE ALL CASH OFFER FOR DOW JONES, THE PUBLISHER OF THE WALL STREET JOURNAL, ACCORDING TO PEOPLE FAMILIAR WITH THE MATTER.

NEWSCORP PROPSED THE ACQUISITION IN A LETTER SENT TO DOW JONES BOARD TWO WEEKS AGO AND THE BANCROFT FAMILY, WHICH CONTROLS THE COMPANY THROUGH ITS OWNERSHIP OF ROUGHLY 62% OF ITS VOTING STOCK, IS CURRENTLY DECIDING ON WHETHER IT WILL CONSIDER A SALE OF THE COMPANY. THE BANCROFT'S HAVE HIRED ADVISORS TO HELP WEIGH THE OFFER AND IT REMAINS UNCLEAR WHAT THE FAMILY WILL CHOOSE TO DO.IT IS NOT A FAMILY THAT ACTS MONOLITHICALLY GIVEN THE CONTROLLING VOTING STAKE IS HELD BY AS MANY AS 20 SEPARATE MEMBERS OF THE BANCROFT FAMILY.THE OFFER HAS NOT BEEN REJECTED. IF DOW JONES BOARD OF DIRECTORS BELIEVES THERE IS ENOUGH SUPPORT AMONGST MEMBERS OF THE FAMILY TO CONSIDER A SALE, IT IS LIKELY TO BEGIN A PROCESS TO DO JUST THAT.

RUPERT MURDOCH, THE MAN WHO HAS BUILT NEWSCORP INTO A MEDIA EMPIRE EXTENDING FAR BEYOND ITS INITIAL ROOTS IN THE NEWSPAPER BUSINESS, HAS NONE THE LESS CARRIED WITH HIM A DEEP DESIRE TO OWN DOW JONES AND ITS PRIZED PROPERTY THE WALL STREET JOURNAL.

LATER THE IS YEAR, NEWSCORP IS EXPECTED TO BEGIN A BUSINESS NEWS CHANNEL TO COMPETE WITH THE ONE YOU'RE WATCHING AND THE ADDITION OF DOW JONES WOULD CERTAINLY HELP THOSE EFFORTS.

CNBC CURRENTLY HAS A PARTNESHIP WITH DOW JONES THAT EXTENDS UNTIL 2012.

THE OFFER OF $60 REPRESENTS A HUGE PREMIUM FOR DOW JONES...A FULL 50% ABOVE THE STOCK'S FITY TWO WEEK HIGH. IT IS ONLY THAT KIND OF PREMIUM THAT WOULD HAVE GIVEN THE FAMILY A REASON TO EVEN CONSIDER SELLING, ACCORIDNG TO PEOPLE FAMILAIR WITH NEWSCORP'S THINKING.

IT IS NOT CLEAR WHAT NEWSCORP SHAREHODLERS WILL THINK OF THE BID. DESPITE THEIR UNIFORM BELIEF THAT MR MURDOCH IS A VISIONARY, HIS SHAREHOLDERS HAVE NOT ALWAYS BENEFITTED FROM THAT VISION, WHICH HAS ALSO BEEN CHARACTERIZED AS EMPIRE BUILDING. THEY MIGHT PREFER HE USED THE $5 BILLION TO BUY BACK MORE STOCK..SOMETHING NEWSCORP HAS BEEN DOING AGGRESSIVELY.

AGAIN, THE KEY HERE IS THE BANCRFOT FAMILY, THE DYNAMICS OF WHICH ARE HARD TO DISCERN. IT IS POSSIBLE THAT SOME MEMBERS WILL SUPPORT A SALE PROCESS. ENOUGH SO THAT THE BOARD WILL AUTHORIZE ONE, BUT NOT ENOUGH TO ASSURE THAT EVEN IF A DEAL IS REACHED IT WILL BE ABLE TO PASS A SHAREHOLDER VOTE. THE BANCROFTS HAVE LONG CHERISHED THEIR ROLE AS CONTROLLING SH A REHODLERS OF THE COMPANY BOUGHT BY CLRENCE BARRON IN 1902. BUT THERE HAVE ALSO BEEN CRACKS IN THEIR RANKS REGARDING THE OPERATIONS OF TEH COMPANY, WHICH HAS NOT BEEN A STRONG PERFORMER.

IF DOW JONES IS OFFICIALLY PUT UP FOR SALE, OTEHR BIDERS MIGHT INLCUDE BLLOMBERG OR EVEN PRIVATE EQYITY FIRMS. AS I ERPORTED LAST FALL, WITH A VALUE THAT PROBABLY EXCEEDS $20 BILLION, BLOOMBERG EASILY HAS THE FINANCIAL MUSCLE TO BORROW THE FUNDS NECESSARY TO MAKE A BID FOR DOW JONES. IT REMAINS TO BE SEEN WHAT OTHER BIDDERS MIGHT EMERGE FOR A TROPHY PROPERTY THAT, IF IT IS FOR SALE, WILL NOT LIKLEY BE AVAILABLE AGAIN.





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