GE, Pearson Drop Out of Race for Dow Jones

By: E&P Staff Rupert Murdoch's controversial bid to take over Dow Jones & Co. got a big boost Thursday with the joint announcement by General Electric and The Financial Times publisher Pearson that they will not make a rival offer for the publisher of The Wall Street Journal.

The statements, confirming reported exploratory talks between GE and Pearson, followed Wednesday's news that Dow's board has become impatient with the controlling Bancroft family stockholder's pace of negotiations with Murdoch's News Corp., and will now lead the talks. The move is widely seen as a boost for Murdoch's $60-a-share bid, a 67% premium on Dow Jones stock trading price before word of the deal leaked.

The Bancrofts have been hoping to attract rival bids for Dow Jones, and the possible GE and Pearson combination was seen as the most credible possibility to emerge.

GE and Pearson did not give any specific reason they had broken off exploratory talks for a venture that would have combined GE's CNBC cable operations, the FT, and Dow Jones.

The statement did add, however, that "Pearson and NBC Universal continue to discuss cooperative agreements between CNBC and the Financial Times Group."

Murdoch's reputation for imposing his views on the coverage of some of his newspapers has proven a big stumbling block for his rich, $5 billion offer for Dow Jones.

A Bancroft family bloc, representing just over half the voting stock, at first seemed to flatly reject the deal. Then, in late May, the family invited News Corp. to present its plan for Dow Jones -- a meeting at which, according to reports, Murdoch repeatedly vowed to preserve the editorial independence and integrity of the Journal.

Since then, the Bancrofts have spent much time crafting corporate structures that would insulate the newsroom and opinion pages from his influence. Some of the proposals have reportedly gone too far for Murdoch.


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