Subject:  Dow Jones to buy MarketWatch for $520M |
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Date Posted: 00:17:55 11/15/04 Mon
Dow Jones to buy MarketWatch for $520M
By CBS MarketWatch
Last Updated: 11/15/2004 1:48:50 AM
SAN FRANCISCO (CBS.MW) -- MarketWatch Inc., which owns the CBS.MarketWatch.com Web site, agreed to be bought by Dow Jones & Co. for $520 million on Sunday, ending a month-long bidding war for the online financial news and information provider.
The two companies said Dow Jones (DJ) will pay $18 a share for MarketWatch (MKTW) in a deal that allows the parent of the Wall Street Journal to expand its reach into the consumer financial news business.
The deal comes after MarketWatch was approached by several firms indicating interest in its news, advertising sales and licensing businesses.
Viacom (VIA)(VIAB), which has a significant stake in MarketWatch, the publisher of this report, announced Nov. 4 that it planned on making a bid for the company. Other bidders included the New York Times Co. (NYT) and Yahoo (YHOO), according to media reports.
If the deal is approved by shareholders, Dow Jones gains a valuable foothold in the fast-growing Internet content and advertising sales businesses, leapfrogging rival Reuters (RTRSY)(RTRRTR), which has been building its own Internet business for the past two years.
"Joining Dow Jones is a great next step for MarketWatch," Larry Kramer, chairman and chief executive officer of MarketWatch, said in a statement. "Being part of one of the most respected media conglomerates in the world gives us a terrific platform to grow our business and compete with the largest media companies. By combining Dow Jones' legendary brands, infrastructure and valuable strategic alliances with MarketWatch's award-winning newsroom and comprehensive suite of business and analytical tools, this transaction supports our mission to be the market leader in licensed and advertising supported financial news and information."
Peter R. Kann, chairman and CEO of Dow Jones, said, "We welcome our new MarketWatch colleagues with great admiration for the success they have achieved and high anticipation of what we can achieve together to benefit our readers and our customers."
MarketWatch's share price has more than doubled since August, amid a surge in Internet ad sales business and on the company's results. It climbed steadily in recent weeks on speculation that someone might approach the company.
On Friday, MarketWatch stock added 13 cents to close at $16.79. The $18-a-share offer represents 46.5 percent premium to the stock's 60-day trading average.
At the end of October, MarketWatch reported that its third-quarter net income more than doubled amid growth in online advertising revenue and integration of its acquisition of Pinnacor.
While the online advertising market is hot, not all companies have benefited. New York-based DoubleClick Inc., a provider of Net advertising services has put itself on the block. DoubleClick (DCLK) said at the end of October that it has hired Lazard Freres & Co. to explore strategic options to boost the company's shareholder value. DoubleClick said options include a sale of all or part of the company, recapitalization, an extraordinary dividend, a share repurchase, or a spinoff.
Dow Jones historically has not been focused on the ad-sales supported Internet business. Its major assets include the Wall Street Journal and the subscription Web site WSJ.com, Barron's magazine and Barron's online, the Dow Jones Newswires and Ottaway Community Newspapers.
MarketWatch's two largest investors are Viacom and Pearson Plc (PSO)(PSONPSON), the parent company of the Financial Times Group. Each owns about 23 percent.
MarketWatch was founded in 1997. It operates two Web sites, CBS.MarketWatch.com and BigCharts.com. MarketWatch also produces the syndicated CBS MarketWatch Weekend program and airs financial reports over the CBS television network and the MarketWatch Radio Network. The MarketWatch Information Services group licenses market news, data, investment analysis tools and other online applications to financial services firms, media companies, wireless carriers and Internet service providers.
It is expected that the acquisition will be completed in the first quarter of 2005. Shares of Dow Jones shed 4 cents on Friday to end at $45.
© 1997-2004 MarketWatch.com, Inc.
http://www.investors.com/breakingnews.asp?journalid=23981848&brk=1
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