Schwarzman on his Steed?


In the weeks following Rupert Murdoch’s bid for Dow Jones, I got asked a few dozen times if a private equity firm would step in to play white knight. “No,” I replied, because of the dizzying price point. Moreover, private equity firms are best when buying a strong product that has been underperforming due to operational problems. Dow Jones had been underperforming because of irreversible media market trends (read: death of newspapers), and Murdoch was far more qualified to enact a new media turnaround than were almost any private equity firms (no matter how loathsome some of his other media endeavors may be).

But it does seem that at least one private equity firm made an inquiry: The Blackstone Group.

Dow Jones revealed in an SEC filing that it approached, or was contracted, by 20 potential buyers in addition to News Corp. Among them was a “private investment company“ – which had previously indicated an interest in acquiring Dow Jones. That suitor was The Blackstone Group, as reported earlier today by The Wall Street Journal (natch).

Blackstone signed a confidentiality agreement with Dow Jones on June 20, and the next day received a presentation by Dow Jones executives. Blackstone later said that it could not match the $60 per share offer and, in the end, never submitted a formal bid (nor did any of the other 20 suitors).

Blackstone did right by its LPs in not nearing the $60 per share threshold, although I’m actually a bit surprised that it didn’t come up with a middling offer. Maybe something in the high-40s – enough to provide a good premium to DJ shareholders, and also enough so that the Bancroft family could have kept Murdoch away from its prized WSJ).

Had it done so – and leaked it publicly — perhaps press coverage of Blackstone would have been a bit kinder over the past few months. After all, we often try to protect those who try to protect one of our own…

Do you want exclusive news and analysis about private equity deals, fundraising, top-quartile managers and more? Get your FREE trial to Buyouts! Or subscribe now!