This is a rush transcript from "Your World with Neil Cavuto," May 1, 2007, that may be updated:
NEIL CAVUTO, HOST: This is a FOX News alert from Boston where it seems a titan has all but given up his quest to buy a newspaper icon, another shock to the world to make sure he can and does.
Rupert Murdoch — $5 billion — Dow Jones: That is all you need to know. Put them altogether and you've got one very generous offer for financial powerhouse that includes the Wall Street Journal, Behrens, Market Watch, and the DOW Jones news service, among others. Just how generous? Try a better than 50 percent premium to what DOW Jones was trading at yesterday at this time.
Is it a case of too good to pass up? Let's ask the guy making that offer, Newscorp chairman Rupert Murdoch. Mr. Murdoch, good to have you.
RUPERT MURDOCH, NEWS CORP CHIEF EXECUTIVE: Thank you, Neil.
CAVUTO: Is this so generous that others don't bother to outbid you?
MURDOCH: Well, I hope so. But we feel as this — this is the greatest newspaper in America — one of the greatest in the world. It has great journalists which deserve, I think, a much wider audience. We feel that with coming online and offline, there is a great deal to be done here. It's got great journalists, it's got great management, but it's got rather a confined capital, it needs to be part of a bigger organization to be taken further.
CAVUTO: All right, now, the folks at Bloomberg put out a statement earlier today, the only ones I would suppose with the cash on hand to make a competitive bid, saying essentially that there is no interest on their part. What did you make of that?
MURDOCH: Well, I guess it'd be difficult to buy it and run for president at the same time. But, it was a relief when they came out and said that.
CAVUTO: All right, but there's still a lot of private equity guys out there — Blackstone Group and all these others — that have billions on hand. They could cause some trouble, are you worried?
MURDOCH: No, we're paying — offering a very, very high premium which I don't think they could reach. They need to leverage with a lot of interest-bearing notes and this is already at about 50 times earnings.
CAVUTO: Maybe your biggest worry, Mr. Murdoch, are your own shareholders. Are saying hey, what he's doing, what's he's doing?
MURDOCH: Oh, I think they have faith in me, they have been very loyal to me for a long time. Our company is now worth — has a market value of over $70 billion I think. So, we have had our ups and downs. Often when I have made big moves, the shares have gone down, but then they go up more later on.
CAVUTO: All right, now the next hurdle is the regulatory hurdle. Assuming no one makes a competitive bid, you have to get past the very feisty regulatory environment and a change in Capitol Hill that is not too enamored with you, Mr. Murdoch. So, do you expect problems?
MURDOCH: Oh, I am not aware of that. I have good friends on both sides of the aisle. There are no laws against this. There are no laws covering national newspapers in terms of television stations and overlaps or anything of that sort. We don't have other major national newspapers, so there's no monopoly issue.
CAVUTO: OK, so because you own a major broadcast network, a host of cable news channels, this one you're watching not withstanding, that there are no competitive issues that regulators might look askance at because The Journal is a national paper?
MURDOCH: We cannot see any at all.
CAVUTO: OK. Let me ask you about what is going on with newspapers right now. They were considered a dead medium, dinosaurs. Knight Ridder put himself up for sale, ended up getting scooped up eventually for a nice premium. Then Tribune went private at $8.2 billion deal orchestrated by Sam Zell. What is going on?
MURDOCH: Well, I think young people are reading newspapers less, or reading it on the Web. And we have to adapt ourselves to that, not only to attract leaders to the hard copy of that, but more and more leaders to the online, and to commercialize that. And the great thing and the value of financial journalism and high-quality journalism is that you can charge for it.
The Wall Street Journal and The Financial Times I think are the only two newspapers in the whole world that charge for their online editions.
CAVUTO: All right. Now very soon, Mr. Murdoch, I'm going to be speaking to your friend Jack Welch, who was very interested in buying The Boston Globe, owned by The New York Times, and that went nowhere, because effectively because The Times, I guess, did not want him to own it.
But what do you make of the environment like that? Would this be more of a doable deal because at least, philosophically and editorially, you find a kindred spirit?
MURDOCH: I think that Jack was a bit tight, you know, and he offered him $50 million.
MURDOCH: So this is a big, generous offer. It is a family newspaper. We appreciate the sensitivities.
We are a family company too. This family has done a fantastic job as the guardians of this newspaper and its editorial traditions which were laid down by the great Bernard Kilgore in the 40s, 50s and 60s. When he took the circulation from 30,000 to over a million. And really invented modern journalism. And we realize that the family, although not personally involved, had been great guardians. And we respect that.
CAVUTO: Alright. Now you are referring to the Bancroft family. They own 24.7 percent of the outstanding shares but because of super voting shares and the rest, it works out to better than 60 percent of the vote. Has the family gotten back to you or indicated, I know they are spread out all over the place, but what have they told you?
MURDOCH: Nothing directly other than they are pursuing the matter and discussing it. They have appointed lawyers and bankers as the company and we have too.
MURDOCH: So we will expect to have a meeting sometime in the next two or three weeks.
CAVUTO: So has that been set up or are you talking about setting that up?
MURDOCH: Neither. We haven't talked about it. We haven't been in direct touch.
CAVUTO: Alright. I should disclose for viewers here that I'm helping get a business channel up and running for you. How will this deal affect or impact that?
MURDOCH: I think it will help it, of course. There is a deal already with CNBC, but we just want to have a business channel that lives up to the quality and the traditions of the Wall Street Journal. And if we can do that, we will do very well.
CAVUTO: All right, as you know, Mr. Murdoch, they have personalities, reporters, and editors that appear on CNBC. Deals, I think that continue through 2012. How will this impact that?
MURDOCH: Well, there a lot of other things in The Journal. And indeed their editors appear on FOX every Saturday or Sunday.
CAVUTO: That's right.
MURDOCH: And so, we think there's plenty of room for us all to work together.
CAVUTO: Alright. Just wrapping this up on a couple of housekeeping issues, you mentioned the political environment in Washington, that doesn't concern you. But, as you know, the Democratic presidential candidates are avoiding appearing on FOX News. There is sort of this cascade of opposition to you and do you worry that they are trying to marginalize you or that they would try to take this deal to make life very difficult for you?
MURDOCH: I don't think it is personalized to me. It's just as much to you. There is, they are under pressure from outside organizations like MoveOn.org who would like to marginalize us. But so far, the publicity about that has simply increased our ratings.
CAVUTO: Yes, well that is true. Let me ask you finally about how you bucked the circulation trend. I notice when we look at all the major newspapers across the country, The New York Post, if my numbers are right, was north of seven percent gain, year over year.
MURDOCH: That's correct.
CAVUTO: Do you hope to do the same if you get The Journal? If it includes Barrons and some of these others, to bring what has been stymied circulation up, just with the paper product itself.
MURDOCH: Well, The Journal impact in this period is up a little bit. And we would hope with more resources, expanded coverage of many things, that we would see that circulation increasing.
But more important is the increasing the online, on the Web where people are paying for it and where we hope to find millions of people, around the world.
CAVUTO: OK. We are hearing that members of the family are not too keen on this bid. Have you gotten any indication right now? Again, the crucial thing is here, it is a big family, it is spread out. One of its members was looking at a deal some years back with The Washington Post. What are you hearing — anything contrary to that?
MURDOCH: No. I think that we were hearing last week that the winds were blowing against us, then we heard that they decided to pursue it. I think, frankly, I don't know whether the whole family has been consulted yet. But there is plenty of time. We will take it calmly and hope that they take it calmly and will think about it.
It's a generous offer and we are the sort of people with the same traditions that I think will prove great guardians for this paper.
CAVUTO: Alright. And finally, sir, I am sorry for the delay. We are getting some news-flashes that are coming into us. One concerns, the union, at least opposed to this at face value. Does that surprise you?
MURDOCH: No. I think that people are naturally a little bit frightened of change. I am not expecting that we'll have any serious clashes.
If I'd done this at The New York Times, which was quite an idea, I think we would've had a march.
CAVUTO: You think they will entertain that?
MURDOCH: Not seriously.
CAVUTO: Alright. Rupert Murdoch, thank you very much. We will see how this goes. Rupert Murdoch, the man who runs News Corp and by the way, my boss.
MURDOCH: Thank you.
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