GE's NBC, Microsoft discussed Dow Jones bid
NEW YORK (Reuters) - General Electric Co.'s NBC Universal and Microsoft Corp. explored a competing bid for Dow Jones & Co. but the idea was dropped about a week ago, people familiar with the discussion said on Monday.
Rupert Murdoch's News Corp. is offering $60 per share, or $5 billion, for Wall Street Journal publisher Dow Jones, as the company aims to build a business cable news channel that would compete with NBC's profitable CNBC outlet.
GE and Microsoft discussed matching News Corp.'s bid, according to a report in the Journal, which cited people briefed on the discussions.
"The conversations with Microsoft were exploratory conversations that ended over a week ago," an NBC Universal spokesman said.
NBC is continually evaluating potential strategic acquisitions, the spokesman said.
Sources familiar with the situation described the talks as a very preliminary look at Dow Jones because the company, controlled by the Bancroft family, might come into play. NBC and Microsoft jointly built cable news channel MSNBC.
Dow Jones provides news to CNBC under a contract that expires in 2012, and the future of that relationship under an owner like Murdoch is not yet clear.
"The economics did not make sense," said GE spokesman Russell Wilkerson of the NBC and Microsoft talks.
GE investors said they doubted the NBC interest in Dow Jones was deep-seated or likely to be restored with a different partner, especially as expectations grow on Wall Street that the conglomerate will eventually spin-off its media holdings.
"If GE wants to get a better valuation based on their game plan...media would eventually have to go," said Peter Klein, senior portfolio manager at Fifth Third Asset Management, which manages nearly $22 billion in assets and holds GE shares.
"I would find it amazing they would want to jump in" on Dow Jones, Klein said. "Maybe they are doing a little gamesmanship to position their asset for sale."
A FOOT IN THE DOOR
The Bancrofts initially opposed Murdoch's bid, but have since held talks with the media mogul and said they would explore other possibilities. Dow Jones' employee union is actively soliciting rival bids from U.S. billionaires who have expressed an interest in media assets, though no concrete offer has emerged.
Dow Jones' union has said it was trying to drum up interest from six to 10 potential suitors. But GE was not one of the parties contacted, according to Steven Yount, president of the Independent Association of Publishers' Employees.
"Would NBC be a more comfortable fit than (News Corp.'s) Fox News? You know, yes," Yount said. "But that doesn't mean that is the only choice that is there. There are all kinds of options that would be preferable to News Corp." Continued...
