General Electric Co (GE), the parent of NBC, and Pearson, the publisher of the Financial Times, are exploring a joint bid for Dow Jones and Co to rival an offer made by News Corp, people familiar with the talks said on Sunday.
If such a bid were made and accepted, it would create a financial news powerhouse combining the Wall Street Journal, CNBC, the Financial Times and Dow Jones Newswires.
Pearson took the lead weeks ago by shopping for partners to make an offer for Dow Jones, and Jeffrey Immelt, GE's chairman and chief executive, has taken a serious interest in the possibility, the sources said.
But some executives with the companies involved cautioned that the talks were preliminary and that no real exploration of the financials of such a deal had taken place. They also said that matching the US$60-a-share offer by News Corp was, as one said, "a very high threshold."
Even so, people with knowledge of the talks said that Jeff Zucker, chief executive of NBC Universal -- the GE unit that includes CNBC -- and Mark Hoffman, president of CNBC, who were scheduled to attend a conference in London yesterday, instead stayed behind, at least partly because of the talks with Pearson.
Newsroom employees at Dow Jones have hoped for a rival bidder, predicting that Rupert Murdoch, who controls News Corp, would not invest in the serious journalism that the WSJ and the company's other properties have been known for.
But a person with knowledge of the Pearson-GE talks noted that a deal with those companies might not be to the journalists' liking either, because it offers more opportunities to cut jobs by eliminating overlapping functions. The Financial Times, the WSJ, the newswires and CNBC often have reporters and editors doing much of the same work -- in some cases, in bureaus in Asia and Europe that are expensive to run.
In addition to the strategic advantages of joining forces with Dow Jones and the WSJ -- two of the most respected names in business journalism -- a deal would have defensive value for Pearson and GE. News Corp plans to start a business news channel on cable to compete with CNBC, and analysts predict that Murdoch would try to use the WSJ to crush the Financial Times, its smaller rival.
The Bancroft family, owners of a controlling stake in Dow Jones for more than a century, are looking seriously at Murdoch's offer, but many family members have voiced a distaste for the tabloid-style journalism his company is best known for.
They have been trying to draft a deal that would restrict News Corp's control over the news and editorial arms of the WSJ and the newswires. Family advisers have even suggested that they might accept a lower offer from a buyer they consider more reputable.
One version of a deal that is being explored by Pearson and GE would group the financial news operations -- including Barron's and The Economist, which is partly owned by Pearson -- into a new corporate entity, owned primarily by those two companies, with the Bancrofts holding a minority stake, perhaps as much as 20 percent.
Some of the Bancrofts say that family elders who control most of the stock in Dow Jones would prefer a stock swap to an all-cash deal, to avoid a big tax liability.
But as with other elements of the talks, officials cautioned that that arrangement is one of many possible outcomes.
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