As Dow Jones & Co.’s controlling Bancroft family continues discussions about selling to Rupert Murdoch, General Electric Co. and Financial Times publisher Pearson PLC are in talks about making a joint bid for Dow Jones that would allow the family to keep a minority interest.
Under a scenario that has been discussed, GE’s CNBC unit, the Financial Times and Dow Jones would be combined in a privately held joint venture, according to people familiar with the matter. The joint venture would be owned in equal parts by GE and Pearson, with the Bancroft family that controls Dow Jones maintaining a minority stake in the new company, these people said.
The GE-Pearson discussions — which are preliminary and could collapse, these people cautioned — signal that a viable alternative may be emerging to News Corp.’s $5 billion bid. Until now, Murdoch, News Corp.’s chairman, has been in the pole position, with few serious bidders surfacing.
But the appearance of GE, which owns NBC News and the CNBC business channel, and Pearson brings two names that may be more palatable to the Bancroft family, which has been haggling over negotiating an editorial-independence agreement with Murdoch.
The proposed company would have a strong presence in business news and financial information around the world. In addition to The Wall Street Journal, the Financial Times and CNBC, it would own Barron’s, 50 percent of The Economist magazine and interests in business newspapers in Russia, France, South Africa and India, as well as the leading stock exchange indexes in both the United States and Britain. It would also own the MarketWatch.com business news Web site, a controlling stake in Interactive Data Corp., a compiler of financial information, as well as the Factiva electronic news database and the Dow Jones Newswires.
Both Pearson and GE have reason to fear a Murdoch-Dow Jones combination. News Corp.’s global presence would help The Wall Street Journal compete with the Financial Times in Europe and Asia, and a Fox News business channel with a Dow Jones imprimatur would threaten CNBC.
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Pearson and GE are also taking advantage of the lengthy negotiations among Bancroft family members over a proposal to safeguard Dow Jones’ editorial independence in the event of a News Corp. takeover. The Bancroft family is struggling to come to terms with a News Corp. deal and has been laboring over the proposal, which one of them said “still needs a lot of work.”
Although a revised proposal hasn’t been sent to News Corp., some in the Murdoch camp are frustrated at what they believe to be excessive demands, saying they would essentially leave control in the hands of the family and leave News Corp. as bystanders. “We’re not going to spend $5 billion and then leave them the keys to the house,” said one person in the Murdoch camp. News Corp. declined to comment about the Pearson-GE talks.
The family members on Dow Jones’ board and their advisers met with Murdoch two weeks ago but haven’t agreed on a proposal they think protects the Journal.
Some family members have tried to slow down negotiations with Murdoch and fear they may not be able to come up with a sufficiently strong structure. That delay gave GE time to reconsider and have discussions with other parties, according to a person familiar with the company’s thinking.