Dow Jones' Bancrofts reject Murdoch's offer

The Bancroft family, Dow Jones & Co.'s (NYSE: DJ) controlling shareholders, rejected a $5 billion offer for the publisher of the Wall Street Journal from Rupert Murdoch's News Corp. (NYSE: NWS).

News of Murdoch's $60 sent shares of the New York-based media company skyrocketing. How the family can ignore a 65% premium over its Monday closing price is beyond me. This may have been the last hope for Dow Jones' long-suffering shareholders, those that didn't ride today's rally anyway.

As I argued earlier, it's unlikely that Murdoch did this without at least getting some indication that the Bancrofts might be interested in selling. MarketWatch says the Australian billionaire's overture "appears to have been narrowly" rejected, without explaining itself further.

Murdoch doesn't have many options since the Bancrofts, like the New York Times Co.'s Sulzbergers (NYSE: NYT), control Dow Jones through a dual class stock ownership system. This story isn't over yet.

Dow Jones, whose Wall Street Journal editorial page regularly rails against trial lawyers, may get to know quite a few of them soon. The board is going to have lots of explaining to do.

Meanwhile, I would like to offer my condolences to anyone who bought shares of Dow Jones or other newspaper stocks on this rally.