Murdoch withdraws bid for Newsday
Murdoch's withdrawal leaves two other bids for Tribune Co. to consider: Cablevision Systems Corp.'s $650 million offer or a $580 million bid from New York Daily News owner Mortimer Zuckerman. There's the possibility of a higher offer from Zuckerman or a last-minute entry by a new suitor.
"It became uneconomical for us to continue," Teri Everett of Murdoch's News Corp. said.
A source close to talks between News Corp. and Newsday's parent, Tribune Co., confirmed that they had parted ways. Both Murdoch and Zuckerman bid $580 million for Newsday and its subsidiaries, including the commuter paper amNewYork. But Cablevision, based out of Bethpage, N.Y., countered with a bid that was $70 million higher.
Murdoch's exit comes days after he confidently told stock market analysts and journalists that he would prevail over Cablevision "in a couple of days."
He sought to buy Newsday to combine its printing, distribution and other back-office operations with that of his New York Post. The combination would make the Post profitable.
However, sources familiar with the negotiations said Zell was concerned about federal regulators holding up the sale of Newsday because Murdoch already owns two newspapers and two television stations in the New York City metropolitan area.
Spokesmen for Zuckerman, Tribune and Cablevision declined to comment.
Tribune has been looking at bids for Newsday, because the clock is ticking on about $1 billion owed this year from its $12 billion debt, most of it from Zell taking Tribune private in December. Out of all the bidders, Murdoch would have faced the most federal challenges, including antitrust and his ownership of two television stations and two newspapers in the New York market.
"I really think that Tribune is very focused on making sure that they work with someone who can get the deal closed," said Mike Simonton, a bond analyst from Chicago-based Fitch Ratings. "The regulatory and legislative uncertainty around cross-ownership could have been playing a role in Tribune's thinking in terms of who to work with."
It's not clear why Murdoch pulled out Saturday, because he's known for more than a week of Cablevision's higher offer to Tribune officials.
Simonton said the way Murdoch last year bought Dow Jones, which owns The Wall Street Journal, may be a glimpse of why he's backing out of buying Newsday.
You can be the first to comment on this story.