Billionaire Burkle mulls Dow Jones bid

MURDOCH CHALLENGE; Supermarket magnate seen as friendly buyer

Peter Morton, Financial Post

Published: Wednesday, June 06, 2007

A bidding war for Dow Jones & Co. may yet develop as Ron Burkle, the Los Angeles supermarket billionaire, appears to be interested in helping find an alternative buyer to Rupert Murdoch for the publisher of The Wall Street Journal.

The union representing 2,000 Dow Jones and Journal employees said yesterday it contacted Mr. Burkle in a bid to find a counter offer to Mr. Murdoch, the Australian media magnate and owner of Fox Broadcasting. The Independent Association of Publishers' Employees (IAPE) said it has also approached Warren Buffett on a potential counter-offer for the Journal.

The IAPE said so far only Mr. Burkle has expressed an interest in bidding against Mr. Murdoch's US$5-billion hostile offer. Mr. Burkle's office would not comment nor would Mr. Buffett beyond saying he had received a letter from the union.

The IAPE is anxious to find what it believes will be a more friendly buyer because of Mr. Murdoch's reputation for direct meddling in editorial operations. Mr. Murdoch also owns News Corp. Jim Ottaway, a major shareholder, is also opposed to Mr. Murdoch's bid.

The Journal ran a story on its front page yesterday suggesting that Mr. Murdoch's media properties have made coverage decisions that advanced the interests of his media conglomerate, News Corp.

The IAPE's solicitations came after Mr. Murdoch this week held his first meeting with three key Bancroft family members who also sit on Dow Jones' board. Both Mr. Murdoch and a family representative said the talks were "constructive."

The Bancroft family was originally against Mr. Murdoch's unsolicited offer but seems to be softening. The Bancroft family, descendents of Dow Jones owner Clarence Barron, controls 64% of the company's shareholder vote through a special class of super voting shares.

Steve Yount, president of the IAPE, said Mr. Burkle's interest was only preliminary, and the details had yet to be sorted out. Mr. Yount also said the union had also contacted other potential bidders but refused to identify them.

The union suggestion to Mr. Burkle was made through his Los Angeles-based investment company, The Yucaipa Companies. So far, Mr. Burkle's company has agreed just to advise the union, said Frank Quintero, a spokesman.

"Our union remains hopeful that the Bancroft family will conclude that a sale of Dow Jones is not necessary. But if the Bancroft family is to be persuaded that a sale must take place, we believe that there are alternatives to Mr. Murdoch," said Mr. Yount.

The possibility of a second bidder for Dow Jones sent the company's stock up US34? yesterday to close at US$60.50, just slightly above Mr. Murdoch's offer of US$60 per share.

Mr. Burkle, a former grocery store bag boy who made much of his wealth by investing in supermarket chains, had tried to buy the Tribune Co., publisher of the Los Angeles Times, Chicago Tribune and other newspapers, with fellow billionaire Eli Broad. The company was ultimately sold to a consortium led by Sam Zell, a Chicago real estate investor.

Mr. Burkle's experience with newspaper unions is not new. Last year, he joined forces with nine Knight Ridder Inc. newspapers in an effort to buy that company. Knight Ridder wound up selling itself to McClatchy Co., another California-based publisher.

"It's very interesting, but I'm skeptical Mr. Burkle and the union can compete with Mr. Murdoch," said Richard Dorfman, managing director of Richard Alan Inc., an investment firm focusing on media companies based in New York.

Despite worries that traditional newspapers are being eroded by the Internet, there has been a flurry of interest in some of the major media companies this year.

However, much of that takeover interest is spurred not by the printed versions of newspapers but by vast databases.

Thomson Corp. is making a US$17.8-billion bid for Reuters Group PLC to get its real-time financial news and information.

Dow Jones, a Reuters rival, gets much of its revenue from its paid subscription Web site, the database Factiva and the online financial website MarketWatch.

pmorton@nationalpost.com



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