Pearson Plc (NYSE: PSO) and General Electric Co. (NYSE: GE) dropped plans on Thursday to propose a bid that would have rivaled News Corp.â€™s $5 billion offer for Down Jones & Co., Inc. (NYSE: DJ), publisher of the Wall Street Journal.
GE and Pearson had discussed combining their financial news properties to make a run past Rupert Murdochâ€™s $60 per share offer for the company. Industrial conglomerate GE owns cable business news channel CNBC and Pearson owns the Financial Times.
Pearson has had exploratory talks with GE about opportunities in business and financial information, including Dow Jones, and has decided not to pursue a combination of CNBC, the Financial Times Group and Dow Jones,â€ Pearson said in a statement.
The companies said they were still discussing possible agreements between CNBC and the Financial Times group.
The News Corp. bid, disclosed on May 1, represented a 65 percent premium to Dow Jonesâ€™ stock's price. The high price was meant to ward off rival bidders, analysts said.
Without competition from GE and Pearson, News Corp. may not have to increase the initial bid.
However concerns over editorial independence at the Wall Street Journal under new ownership will play a role in whether the Dow Jonesâ€™ controlling shareholders, members of the Bancroft Family, accept the offer.