GE, Pearson drop Dow Jones takeover pursuit
NEW YORK (Reuters) - General Electric Co. and Pearson Plc said on Thursday they would not pursue a joint offer for publisher Dow Jones & Co. Inc., removing a potential challenge to a $5 billion bid by Rupert Murdoch's News Corp..
GE -- which controls NBC Universal, the operator of business news channel CNBC -- and Pearson, publisher of the Financial Times, said they had held exploratory talks about combining their financial news outlets with Dow Jones.
"Following these discussions, GE and Pearson have decided not to pursue this combination," GE said in a statement. "Pearson and NBC Universal continue to discuss cooperative agreements between CNBC and the Financial Times Group."
On Wednesday, Dow Jones said its board would take over negotiations with News Corp. on its bid. The decision could bring those talks to a quicker resolution.
Murdoch aims to compete with CNBC with a business news channel of his own, due to be launched later this year. But analysts said the potential competition alone would not motivate GE to make an offer for the publisher of the Wall Street Journal.
"GE is pretty disciplined on financial returns, and I think when they started looking at what was involved, the numbers didn't work," said Benchmark Co. analyst Ed Atorino.
A spokesman for the Bancroft family, which controls Dow Jones through its voting shares, declined to comment, as did News Corp. and Dow Jones officials.
MURDOCH BID STANDS ALONE
Absent GE and Pearson, Murdoch is likely to remain the sole bidder for all of Dow Jones, Atorino said.
"If Bill Gates or Paul Allen or the Google kids ... want to write a check for X billions of dollars, that's out of my realm of probability," he said.
" if you're at GE and somebody brings this deal to you, you're going to smack them in the face ... Who are these Bancrofts and why should we give them $5 billion?"
Murdoch has bid $60 a share for Dow Jones. The company has sought to encourage other potential suitors to make an offer. No rival bids for the entire company have emerged, though MySpace co-founder Brad Greenspan has offered to buy a 25 percent stake at $60 per share.
The Bancroft family spent several weeks discussing the offer and working on a proposal to get Murdoch to protect the editorial independence of Dow Jones's news operations.
The decision came after some non-family members on the board expressed concern that the Bancroft family's deliberations would take so long that Murdoch would withdraw his offer, according to the Wall Street Journal.
On Wednesday, the family submitted proposals to the board that it wants to present to Murdoch, including protection for key editors, an independent editorial board and an unspecified amount of power for the family to enforce the proposals.
Dow Jones shares fell 94 cents to close at $59.71 on the New York Stock Exchange. GE rose a penny to close at $38.80. News Corp.'s Class A shares fell 2 cents to $22.08. Pearson fell 0.9 percent to about 831 pence on the London Stock Exchange.
(Additional reporting by Kenneth Li in New York, Scott Malone in Boston and Jonathan Cable in London)
