Burkle to aid Dow Jones bid
Los Angeles billionaire Ron Burkle has agreed to advise a union representing Dow Jones & Co. employees in crafting a bid that would keep the company from being sold to Rupert Murdoch’s News Corp., his representatives said Tuesday.
The grocery store magnate has not pledged to financially back a bid for the owner of the Wall Street Journal and other news outlets, according to people familiar with the discussions. They said he was unlikely to put up a significant investment because of the steep $5-billion price offered by Murdoch.
At least one other wealthy individual and a Wall Street corporation told the union they were interested in joining a bid, people connected to the labor group said. A member of the Bancroft family, which controls Dow Jones, also has expressed interest in meeting with the union, these people said. Union officials said they were acting out of concern that the journalistic work of their members could be compromised when it conflicted with Murdoch’s business or political goals.
“There is a reason that Dow Jones has to remain an editorially independent company,” union President Steve Yount said. “The Wall Street Journal is one of two well-regarded national newspapers,” along with the New York Times.
Dow Jones shares rose 34 cents to $60.50, closing above Murdoch’s $60-a-share offer made last month.
Yet even the union says the effort is a long shot because Murdoch’s bid is so high, representing a 67% premium over Dow Jones’ value before his offer was announced. “It’s not going to be easy,” Yount said. “If somebody quoted me the odds on this, I probably wouldn’t do it.”
A spokesman for Burkle’s Yucaipa Cos. investment firm confirmed that Burkle was advising the union, which is affiliated with the Communications Workers of America. The union recently hired Ownership Associates Inc., which structures employee buyouts of companies.
The use of employee funds, which carries significant tax advantages, has gotten renewed attention in the wake of the successful bid for Tribune Co. by financier Sam Zell of Chicago, who is relying on money from that company’s newly created employee stock ownership plan to take the media giant private.
Burkle, a prominent Democratic fundraiser who earned much of his money buying and selling supermarkets, unsuccessfully teamed with unions last year in bidding for newspapers owned by Knight Ridder Inc.
Yucaipa also worked with the Teamsters in proposing a U.S. Bankruptcy Court reorganization of Allied Holdings Inc., a car-hauling firm that owes Yucaipa money.
Edward Atorino, an industry analyst at Benchmark Co. in New York, warned that few others would be likely to pay the price that News Corp. was offering.
“Nobody’s going to pay $5 billion for Dow Jones. It doesn’t work,” Atorino said. “It only works for Murdoch because he’s buying it to start up his financial network,” the Fox Business Channel.
Preserving the Journal’s independence was the subject of a meeting Monday between Murdoch, the Bancrofts and Dow Jones’ chairman.
The Bancrofts want an oversight board for the newsrooms that they would pick and that would choose its own successors, while Murdoch wants a board controlled by News Corp., people briefed on the talks said.
The two sides are expected to meet again soon, although Murdoch isn’t likely to attend, News Corp. spokesman Andrew Butcher said. Dow Jones and the Bancrofts declined to comment.
Times staff writer Thomas S. Mulligan in New York contributed to this report.
