How To Make Murdoch/DJ Story Relevant?

For the first time in a long time, the day’s big financial story has nothing to do with private equity. That story, of course, is Rupert Murdoch’s $5 billion (opening) bid for Dow Jones. But could it have something to do with private equity? Could there be rival bidder?

The smart money says “no,” given that Murdoch’s offering already is more than 16x Dow Jones’ projected 2007 EBITDA. Sure it’s possible that a strategic might stick its nose in – think Bloomberg, Reuters or Thomson – but voluntarily entering a bidding war with News Corp. is like entering a marathon against a Kenyon champion. You might be able to stick around for a while, but eventually you’ll tire. In other words, probably not worth trying.

Private equity firms could certainly afford the deal — $5 billion has become chump change – but they would run into that glaring multiple problem. Murdoch doesn’t mind overpaying because Dow Jones is of strategic value to him (Fox Biz Channel), whereas private equity firms would be stuck with an overpriced stand-alone asset. Unless…

What if a private equity firm did a sponsored spinout of NBC from General Electric, and acquired Dow Jones as part of the deal? I know it’s a long-shot, but so are many of the best private equity transactions…