In July 2005, Australian-based media giant News Corp launched a series of acquisitions involving U.S. assets. The first was a $580 million buyout of Intermix Media, owner of Myspace. com, the fifth most viewed Internet domain in the United States at the time. Rupert Murdoch, the media mogul running News Corp, calculated that the Myspace networking site would drive traffic to his Fox TV sites. Murdoch’s next purchase came in September 2006, when News Corp acquired, from Verisign, a majority stake in Jamba, which runs Jamster, a download service for such commodities as ring tones and screen “wallpapers.” News Corp’s intent was to hardwire Fox’s presence in the entire content life cycle, from creation, through production, to delivery on your screen. It already had a mobile content provider, Mobizzo, launched in June 2005 under the Fox Mobile Entertainment division. Among the things Mobizzo was designed to offer were 1-minute episodes derived from Fox properties such as its American Idol franchise. In May 2007, News Corp set its sight on a new target, Dow Jones, publisher of the Wall Street Journal and Barron’s and the owner of other financial news and content assets, including the Dow Jones Newswires, the financial website MarketWatch, and several stock market indicators (for example, the Dow Jones Industrial Average). Murdoch’s News Corp bid $5 billion for Dow Jones but faced resistance from members of the Bancroft family—descendants of Clarence Barron, the “father of financial journalism”— which controls more than 50% of the voting power in the company. The News Corp bid was remarkable for its premium, which would value Dow Jones at more than double its trading value prior to the bid. International mergers such as the ones pursued by News Corp are not as easy to execute as domestic mergers. Complicating matters are multiple legal and regulatory regimes, cultural differences, and complex timing requirements involving simultaneously closing the deal in multiple jurisdictions. Further complications may arise from a potential distrust of employees or owners from another country. In the Dow Jones case, the Dow Jones board and the Bancroft family sought to negotiate some level of independence for the Journal so that it might remain free of corporate interference. Ultimately, Rupert Murdoch would have his way. On December 13, 2007, News Corp announced the completion of its acquisition of Dow Jones. The terms of the merger agreement provided that each share of Dow Jones common stock was entitled to receive, at the election of the holder, either $60.00 in cash or 2.8681 shares of Class B common units of Ruby Newco LLC, a wholly owned subsidiary of News Corp. Ruby Newco Class B common units are convertible after a period of time into a share of News Corp Class A common stock. On completion of the merger, Dow Jones became a wholly owned subsidiary of Ruby Newco, and Natalie Bancroft was appointed to the company’s board of directors. In 2010, the international tide changed for News Corp, and selling rather than buying became the norm. In 2010, Fiji’s government began to require the country’s media outlets to be 90% owned by Fiji nationals, resulting in the sale of Fijian newspapers (Fiji Times, Nai Lalakai, and Shanti Dut) to Motibhai Group of Companies. Then, in 2011, the struggling Myspace, after much effort to find a buyer, was sold to buyers Justin Timberlake and Specific Media. In July 2011, News Corp closed its United Kingdom News of the World newspaper, which was in the midst of a scandal, and withdrew its takeover bid for BSkyB. Citing growing concerns about the recent scandals and a desire to “unlock even greater long-term shareholder value,” Murdoch announced on June 28, 2012, that News Corp would be split into two new publicly traded companies. Publishing operations became the “new” News Corporation, with Robert James Thomson, editor of the Wall Street Journal, as CEO. Murdoch remained CEO of the media operations and properties (such as the Fox Entertainment Group and 20th Century Fox) that became 21st Century Fox. Murdoch remains chairman for both companies.

If you had been a shareholder of Dow Jones, what tradeoffs would you have considered when deciding whether to take the $60.00 per share or the shares in Ruby Newco?