No shock, really
Jun 21 2007From an email alert, which provided easily 30 seconds’ headstart before everyone in the financial world also reported it:
NEWS ALERT from The Wall Street Journal
June 21, 2007
General Electric and Financial Times publisher Pearson said they have decided not to pursue a combination of CNBC, the Financial Times and Dow Jones. A possible bid by GE and Pearson was seen as a challenge to News Corp.’s $5 billion bid for Dow Jones, publisher of The Wall Street Journal. GE and Pearson said they continue to discuss cooperation agreements with GE between CNBC and the Financial Times Group.
For more information, see:
http://wsj.com/article/0,,SB118244257856443515,00.html?mod=djemalert
Somewhat inexplicably, the Dealbreaker Murdoch Meter remains at only 90%
Addendum - As referenced in yesterday’s post, Brad Greenspan, the “founder” of MySpace, tossed an offer over the transom, and it seems I’m hardly the only one to have ascribed grudge-based intent to his effort. In that Valleywag article just linked, they provided a further link for Greenspan’s letter to the Dow Jones Board. (included in the extended entry, since I expect the website on which it appears to disappear one day soon. I’d prefer to include a link to Edgar, but the letter’s not on file there)
After reading it, I had a flashback to October, 2001, and a hilariously nut-encrusted SEC filing from a company called TOKS. You can read the full filing at the Edgar site, but to save you the trouble of scrolling past all the boilerplate, I’ve included just a taste, below. Am I wrong to equate that to Greenspan’s “offer”? I think not, but what would you expect me to think?
Filed by Toks Inc. Pursuant to Rule 425
under the Securities Act of 1933 and
deemed filed pursuant to Rule 14a-12
under the Securities Exchange Act of
1934
Subject Company: AT&T WIRELESS SERVICES INC
Commission File No. 333-67068
Date: October 8, 2001
Toks Announces Proposal to Combine With General Motors Corporation, Hughes
Electronics Corporation, General Electric Company, AT&T Corporation, AT&T
Wireless Services, Inc., AOL Time Warner and Marriott International for a rough
estimate of over $2 Trillion or more in stock. Including assumption of all
outstanding debts. There will be amendment of full value that will be calculated
by professional accountants. This is just an initial proposal. This is not the
whole picture of. At the same time Toks Inc. will stick to its original plan to
issue its Class A Common Stock in heavy premium to the shareholders of targeted
entities.
Combination Would Establish Only Toks Inc. as the "Parent" of General Motors
Corporation, Hughes Electronics Corporation, General Electric Company, AT&T
Corporation, AT&T Wireless Services, Inc., AOL Tiime Warner and Marriott
International, Inc. as "Wholly" owned subsidiaries. This will compliment each
subsidiary under one "roof."
Synergies Could Create Up To Additional over $300 Billion in annual revenues,
even after liquidation of assets or spinoffs recommended by regulators and
initiated by the Company. Also a business plan will include aggressive
expansions of Toks Inc. into other industry sectors and its subsidiaries. The
potential to make Toks Inc. the largest U.S public entity. Or the largest public
entity in the world. Expansion will cover all corners of the globe. Our Company
listing will cover different exchanges around the globe to gain access to their
capital markets. This will include developing countries as well.
...
There's a fine line between "ambition" and "desperation." Toks Inc. is an
"ambition" entity not a "desperate" entity. Meaning the Company doesn't
have to fight to convince a shareholder to tender his or her shares. The
Company will take its securities to others if those we first seek rejected our
offer. The Company is not interested in wasting resources to seek proxy
votes. The resources can be better spent to issue securities to those that want
them.
{entire filing, sic, ellipsis mine}
Dow Jones & Company, Inc.
200 Liberty Street
New York, NY 10281
Attention: Board of Directors
Ladies and Gentlemen:
I am the founder of Myspace and following its sale to News Corp. in 2005 have remained very active in the internet space owning, among other things, majority stakes in privately held Live Universe, Inc. and BroadWebAsia, which in the aggregate are composed of over 30 websites that reach approximately 75 million unique users a month across the U.S./Europe/Asia. I do not believe any current publicly disclosed acquisition offers for Dow Jones & Co. fully recognize the potential which Dow Jones’ unique assets, properties, and brands represent.
Accordingly, I, Brad Greenspan (www.bradgreenspan.com) and my advisors would like to meet with you and your representatives at your earliest convenience to discuss an alternative proposal that I believe should be preferable to all of Dow Jones constituencies and which I believe is likely to produce meaningfully greater shareholder value than currently proposed options.
My proposal is as follows:
An investment group led by me (”Journal Investment Group” or “JI”) would purchase from existing DJ shareholders approximately 25% of DJ’s stock at $60 per share for an aggregate of $1.25 billion. The purchase would be structured so that all shareholders could sell at least 25% of their stock, but those shareholders who did not wish to sell any shares would not be required to do so.
Separately, JI would purchase $250 million in stock from the Company at $60 per share, thereby providing the Company with substantial incremental cash with which to accelerate the expansion of its high growth potential internet/online/digital/broadcasting businesses.
I believe that by pursuing the aggressive growth of these “new technology” businesses while at the same time nurturing DJ’s core businesses and maintaining the independent Dow Jones’ culture of integrity and high quality reporting and editorial context, substantial incremental value can be created for both existing shareholders and new investors as well.
Our proposal provides our investment group with a “non-control” minority stock position. We would propose to expand the DJ Board by two seats with which we can hope to submit candidates for your consideration that can add value and help efforts specifically in the online/broadcast areas.
Among the strategic initiatives and goals that I believe should be considered are the following:
Online
1) Grow the WSJ.com and Marketwatch.com websites in the aggregate from current approximate size of 4.3 million U.S. unique users per month combined (according to Comscore/April07) to 15 million U.S. monthly unique users per month. This will vault WSJ/Marketwatch to the position of the most visited/popular/viewed online business website ahead of Yahoo Finance at 10.97 million monthly unique users (Comscore/April07). Execute similar growth goals for European & Asian markets. Goal –
Within 18 months
2) Launch Ad Supported Video Content Network in domestic and international markets (Europe/Asia). Combination of creating original content around current brands (WSJ/MarketWatch/Barrons, and other brands), licensed content, and user generated content. Goal –
Within 24 months, 500 million video views per month across DJ/WSJ Video Network (U.S. and International).
At $30 CPM (current average in technology video space), such video ads alone by month 24 would generate $15 million in revenue per month or $180 million annually of high margin revenue for the Consumer division. We believe this could increase EBITDA of Consumer division of DJ by 300%+ annually.
3) Launch User Generated Content / Business Networking platform to wrap across DJ properties. Platform will generate incremental page views/user activity. Goal –
Within 24 months, increase aggregate non-video monthly page views of the WSJ/Marketwatch properties by 300%.
Broadcast/Satellite/Cable
4) Initiate New Broadcast Strategy. Leverage growth of online audience to cross-promote, invest in creation of, and launch DJ branded content on television both domestically and in European/Asian markets.
-As a point of reference, CNBC generates approximately $300 million per year in operating profits.
-CNBC generates this revenue off 185,000 average viewers per day.
-DJ brands (online/offline) on a daily basis touch approximately 2.7 million people. JI believes that a reasonable effort in promotional efforts could quickly get 10% cross-viewership or 270,000 daily viewers of the DJ financial channel. Within 36 months, a financial channel strategy/effort could create the #1 business brand with 270,000 daily viewers or a leading broadcast brand or family 30% larger then CNBC today. Goal- Within 36 months, have DJ financial news channel/programming that has larger daily audience then CNBC.
In addition to the cash infusion discussed above, JI is in a position to provide strategic assistance in key areas to DJ, including Online Distribution and Technology Partnership. For example, in the areas of Promotion and Distribution, JI would provide both strategic resources, planning and guaranteed online promotion for DJ online/media initiatives.
Two online strategic partners of JI will provide promotion of DJ online/media brands across online network reaching over 75 million unique users per month across 35 websites in the U.S., Europe, and Asia. These are:
LiveUniverse, Inc. - A Los Angeles-based company that consists of a a network of over 20 websites across the U.S. & Europe focused on video and social networking that reaches over 35 million unique visitors per month.
LiveUniverse also holds a 30% non-control stake in:
LiveLeak.com –
A U.K.-based leading Citizen Journalist / Breaking Video News aggregator in which LiveUniverse holds a 30% non-control ownership stake.
BroadWebAsia- A network of over 15 partnered websites focused on the Chinese market that reaches over 40 million unique visitors per month. Two properties, leading video sites Mofile.com and Hubotv.com, together generated 200 million video views in May.
Similarly, in the Technology space, as an interim or permanent solution, LiveUniverse will make available technology solutions/assets for DJ to reach its strategic goals. LiveUniverse has a robust video delivery system and networking platform. LiveUniverse and BroadWebAsia will also leverage their existing infrastructure to pass on economies of scale for DJ’s online hosting/bandwidth costs.
Once again, the transaction I am proposing has numerous advantages over existing proposals to date. Among other things, it:
1) KEEPS THE DJ/WSJ INDEPENDENT FOR THE BENEFIT OF LARGE CONSUMER BASE. Both large shareholders of the DJ and the employees who breathe life into these important objective ’news assets’ have indicated that the DJ and its consumer base is best served if the DJ is independent and not being assimilated and absorbed under a pre-existing major media conglomerate.
2) PROVIDES PREMIUM LIQUIDITY EVENT. Our proposal will facilitate premium liquidity event for all shareholders while allowing them continued upside in publicly traded DJ.
3) ALLOWS DJ TO GO ON OFFENSE - JI will provide capital infusion of $250 million to supercharge online/broadcast/satellite/cable initiatives which have clear growth opportunities in highly lucrative and fast-growing markets.
4) UNLOCKS HIDDEN VALUE - JI will provide injection of knowledge via minority board participation along with hands-on assistance for online/digital strategies to help unlock significantly undervalued and unappreciated DJ-held assets by the public marketplace.
5) PROVIDES UPSIDE FOR EVERYONE! –
Proposed transaction should yield a significant ROI over the next few years for the investors of JI and all shareholder classes/groups along with employees.
I very much look forward to meeting with you and your advisors at your earliest convenience to discuss this proposal. I am also available to travel to NY to meet in person this week or early next week. I am confident that we can work together to consummate this transaction very promptly. Please contact me at Brad Greenspan, Journal Investment Group, c/o Irell & Manella LLP, 1800 Avenue of the Stars, Los Angeles, CA 90067, attention: Al Segel. You can email me directly at Brad@liveUniverse.com.
Very truly yours,
Brad Greenspan
Dow Jones & Company, Inc.
200 Liberty Street
New York, NY 10281
Attention: Board of Directors
Dow Jones & Company, Inc.
June 19, 2007
[...] No shock, really [...]
