This week, News Corp. (NWS) submitted a $5 billion bid for Dow Jones (DJ) – that’s a 65% premium – now shareholders are hanging on for the ride, even exchange traded funds (ETFs). Dan Gallagher and Angela Moore of MarketWatch.com report the Bancroft family (they control a majority of the voting shares) are opposed to the bid, so the board of directors is taking no action. DJ, like other newspaper companies, have a dual-class stock structure that concentrates most voting power in the hands of a controlling family. These so-called supervoting arrangements prevent a hostile takeover.
PowerShares Dynamic Media (PBS) was up almost 2% on the takeover news and is up just 4% this year. NWS makes up 5.11% of the fund and DJ makes up 2.64%, while Direct TV Group (DTV) makes up 5.1%, and Disney (DIS) holds 5.04%. Stay tuned…
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.