Murdoch bids for Dow Jones. Are we surprised?

Rupert Murdoch’s News Corp $5 million takeover bid (about $60 a share) over the Wall Street Journal’s publisher Dow Jones has triggered a nearly 55 percent jump in its stock price on Tuesday, according to Reuters.

Many feel that if Murdoch wins this bid, which needs to be addressed by the Bancroft family who owns over 60 percent of the Dow Jones & Co. voting power, he will use his new power for his own personal and political reasons.

Dow Jones is one of several large U.S. newspaper companies that are controlled by families, an ownership structure criticized by some financial analysts and investors as ineffective.

The Reuters article also said that if the Bancroft’s do not accept Murdoch’s bid, than it will be likely that lawsuits will emerge from shareholders accusing the directors for failing to look after investors' interests.

According to the Boston Globe, Dow Jones said its board would factor the Bancrofts' initial opposition into its evaluation of Murdoch's bid, but the stock remained strong in after-hours trading and analysts said that the drama was far from over.

In reality, all Murdoch is trying to do here is dramatically enhance New Corps national penetration and power in business reporting.

"It fits in News Corp.'s plans to become a multimedia player in financial media," said Louis Capital Markets' head of global research, Robbert Van Batenburg.

News Corp. has said it plans to launch the channel in the fourth quarter. The channel already is guaranteed to reach more than 30 million cable homes, has signed up top cable companies Comcast and Time Warner to carry the channel, and is hiring reporters and news anchors, according to sources close to the situation who spoke on the condition of anonymity because the process is ongoing. (Washington Post)

The Journal has "great journalists; it's got great management," Murdoch said. "But it's got rather a confined capital; it needs to be part of a bigger organization to be taken further."

I’d like to see the family owners of Dow Jones hold on as long as they can, but come on, who can stop the power of Rupert Murdoch. Hopefully this change will be for the better when it happens. Let the buyouts continue, and the quality of business reporting remain unabashed.