Thursday, July 19, 2007

A media mogul wins the crown jewel

How will The Wall Street Journal, one of the world's leading business publications fare when, as seems highly likely, Rupert Murdoch, chairman of the world's third-largest media conglomerate, News Corporation, succeeds in his US$5 billion unsolicited bid for the newspaper's parent company, Dow Jones?

Even before the deal is done, the American regulatory authority, the Securities Exchange Commission, SEC and the Justice Department have launched an investigation. As a wave of companies merge or seek to gain access to the public markets, SEC wants to ensure that trades are not done based on secret information.

SEC notified David Li, a Hong Kong banking magnate and Dow Jones board member, that it plans to recommend filing civil insider trading charges against him. These charges have come just as the merger entered its final phase.

Dow Jones' board has determined it will recommend to its stockholders, including the Bancroft family which holds shares representing a majority of Dow Jones' voting power, News Corp's proposal to acquire all of the outstanding shares of Dow Jones' stock for 60 usd per share cash, or a combination of cash and News Corp stock.

Critics of Murdoch- and he has as many bashers as supporters- argue that over half-century of his career as a journalist and businessman shows that his newspapers and other media outlets have made news coverage decisions that advanced the interests of his sprawling media conglomerate, News Corp.

In the process, Mr Murdoch has blurred a line that exists at many other US media companies between business and news sides — a line intended to keep the business and political interests of owners from influencing the presentation of news.

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