The hottest rumour on Wall Street is that Rupert Murdoch is preparing to increase his bid for the Wall Street Journal. He is considering, it's said, upping his bid for Dow Jones, the company that owns the paper, to $70 per share – that is ten dollars more than his original offer.
One result of the rumour is that Dow Jones shares on Friday jumped almost two dollars – to just over $51.
One trader commented: "It sure looks as if some people know something".
Should Murdoch increase his offer it is felt that the family that owns most of the stock in Dow Jones, the Bancrofts, may reconsider their earlier quick rejection of the News Corp offer. A family conference is said to be scheduled for later this week.
Most reports here in the business journals, including the Wall Street Journal itself, suggest that Murdoch is willing to be patient. The WSJ added that one of his traits is his tenacity. That it said will be an important factor in resolving the outcome of his bid to take over Dow Jones.
The belief – even at the WSJ itself where many staff and executives have publicly voiced their unhappiness at the take-over bid – is that ultimately Murdoch will emerge the winner. And that it won't be long before staff at The Journal will be collecting their paychecks from him.
One Wall Street analyst suggested one reason the deal will ultimately go through is because Murdoch, in his words, is not trying to steal the company. He didn't believe he said that anyone else would submit a competitive bid.
Equally there is a feeling that if News Corp should drop out and withdraw its bid stock in Dow Jones would take a drubbing. And tumble, it has been predicted, to as low as $35 a share – which is what many analysts say is just about what the company is worth.
One staff member of The Journal was quoted saying that if indeed Murdoch does up his offer to $65 or $70 a share it will be a done deal. "We are a sure goner – if we already aren't", he added.
There is also speculation that waiting in the wings is another publishing company ready to snap up Barron's, the Dow Hones business magazine, should the Bancrofts change their mind and do a deal with Murdoch.
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