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If you are a minority shareholder in Dow Jones & Co. you may want to give strong consideration to selling your shares soon, instead of waiting for the Murdock offer to close. Fortunately for minority shareholders, the stock is publicly traded and liquidity exists. They can sell at $55 per share today. Otherwise, if the company were privately held, the 66% control premium offered by News Corp would
possibly never be realized. The stock hasn't traded at this level since 2000 and fundamentals have steadily deteriorated since. The fact that the controlling shareholders are not willing to even consider a 66% control premium clearly indicates that maximizing shareholder return is not a priority. What's sad it that WSJ writers are painting the papers with how terrible the deal is. Sure it is, for them. Though they won't say it, they know if the deal goes through, they will be victims of change or possible pounding the pavement. The real issue here is shareholder prudence, not job security. If this deal falls through, it will be a long time before we see DJ in the 60's. Well the good new is, I guess we can now justify a minority discount of 50% . Or maybe it's not justified.....

Category(s): Valuation Thoughts
Posted by Tom Miller at 03:50 PM | Permalink | Comments (0) | TrackBacks (0)