Posted on 06/11/2007 11:14:23 AM PDT by abb
NEW YORK With all the industry activity over the past year -- Knight Ridder, Tribune and now Dow Jones -- Bear Stearns analyst Alexia Quadrani looks at other potential targets in a note released to investors.
The most likely company to go on the block given how its shares are trading: The New York Times Co. "All signs point to the New York Times," wrote Quadrani. It has all the elements of a take-out candidate including restive shareholders, lagging margins, low debt, and a strong brand name.
The market certainly thinks as much, despite the controlling Sulzberger family's protestations to any offer. The company's shares are trading at premium relative to its peers at 10.3 times EBITDA.
However, Quadrani thinks the possibility of anything happening with the Times is low at best. If there is a slim chance, she estimates the Times would not receive the same kind of offer the Bancroft family is currently considering.
"Although the New York Times has a strong brand like The Wall Street Journal, it lacks Dow Jones' niche appeal and is therefore less likely, in our view, to fetch as high a premium as Dow Jones did - which likely lessens the likeliness of changing the Sulzberger family's mindset," she wrote.
Gannett, with its one class of shares, would seem to be a moving target. Quadrani noted the company is simply too big with a market capitalization of about $14 billion to consume. Furthermore, Gannett already runs a tight ship with high industry margins, leaving little room to cut in operations, according to Bear Stearns.
Journal Register Co., she wrote, is "open for negotiation.” Its high leverage, lagging performance, and markets with weak economics, especially in Michigan, will likely deter bidders, according to the note.
Bear Stearns remains underweight on the sector.
Jennifer Saba (jsaba@editorandpublisher.com) is associate editor at E&P.
Ping
Personally, I think some company like Kimberly Clark, unilver, P & G, etc. should buy them out and introduce a NYT line on some of their products: like NTP insignia toilet paper. The brand name is worth something in the waste sector. Which would sell the best??? NTP toilet paper?, Kittie Litter Pan Liners? Puppy Piddle pads? others?
And the #1 reason to sell out.
Lousy management.
The technology is here~!
... NBC decided to explore a bid after being contacted by investment bankers on behalf the Bancroft family. Both the Bancrofts and Dow Jones have hired investment bankers that have been pursuing potential bidders since the News Corporation offer to buy Dow Jones for $60 a share was disclosed in early May. NBC then contacted Microsoft about the possibility of a joint move.But following a brief review, Microsoft rejected the idea of taking further steps, and NBC agreed, the person said.
For NBC, the News Corporation bid, if successful, raises competitive concerns. Its CNBC is the leading financial news channel on television, generating solid profits for NBC. Mr. Murdoch has said that one of the reasons he is willing to pay a premium price for Dow Jones is that he plans to start his own financial news channel and to tap the news gathering resources and staff of The Wall Street Journal. He hopes to challenge CNBC in financial news, just as his Fox News Channel has proved a formidable rival to CNN and MSNBC.
Another person close to the two companies said they abandoned their plans after they could not see a way to make a purchase of Dow Jones at a price equal to or higher than Mr. Murdoch’s.
the infowarrior
Insert evil laughter here.
(And I have that issue of The National Lampoon)
And now the slimes are raising prices...yeah...that’s how to stop the hemorrhage.
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