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MAY 14, 2007
Edited by Harry Maurer How Now, Mr. Murdoch? Media mogul Rupert Murdoch has never made a secret of his desire to own the ultra-prestigious Wall Street Journal. Finally he pounced. On May 1, CNBC broke the news that Murdoch two weeks earlier sent a letter to the Dow Jones (DJ ) board offering 60 a share, or $5 billion, for the struggling company, a nifty 66% premium. That wasn't enough for the controlling Bancroft family. A trustee for the family soon said it was disinclined to sell—at least at the current offer. Few figured that was the last word. Murdoch, who has a habit of getting what he wants, could boost his offer. Other parties could jump in, though Murdoch may have already bid more than Dow Jones is worth to anyone else. He may be especially enthralled by the Journal's Web site, with 930,000-plus paying subscribers, and the company's possible synergies with his upcoming Fox Business Channel (NWS ). See "Smoking out suitors for Dow Jones" Browne's Sudden Exit As if BP (BP ) hadn't suffered enough pr disasters in the past year, CEO John Browne quit on May 1 after losing a court battle to prevent London's The Mail on Sunday from revealing details about his relationship with a young Canadian, Jeff Chevalier. The resignation cost Browne, 59, some $31 million in severance and other benefits. He was succeeded by Anthony Hayward, who was scheduled to become CEO in July. See "BP's Browne Bows Out Early"   Patent Landmarks Two weighty patent rulings flowed from the Supreme Court on Apr. 30. The first, involving automobile gas pedals, may stem the tide of so-called junk patents that critics say have been issued and upheld by courts in recent years. In the other, the court sided with Microsoft (MSFT ) against AT&T (T ) in ruling that damages are not available under U.S. law for foreign duplication of software. The Dolans Do It If only their sad-sack Knicks basketball team were this tenacious. Cablevision System's (CVC ) founding Dolan family won in their third try to take the Bethpage (N.Y.) company private when its board on May 2 accepted a $10.6 billion cash bid. The deal gives the Dolans control of 3 million cable subscribers as well as Madison Square Garden, the NHL's Rangers, and the Knicks. Growth Takes A Breather The economic news wasn't as bad as it first looked. Sure, the Commerce Dept. said on Apr. 27 that the economy grew at an annual rate of just 1.3% in the first quarter, the slowest in four years. One culprit: sluggish residential construction. But economists expect an upward revision, to a still-soft 1.8%. One bright spot: a rebound in spending by business on equipment and software. And consumers are still spending more than they earn. Fannie Makes Progress Fannie Mae's (FNM ) May 2 securities filing shows how far the company has come since regulators forced it to restate earnings in late 2004. Included in the 596-page release is a laundry list of past "material misapplications" of accounting rules, more than 66 errors in all. Fannie is now just 13 months behind in its SEC disclosures, compared with three years, and it reported $6.3 billion in profits for 2005—a 26% surge from 2004. The New Delta When Atlanta-based Delta Air Lines (DALRQ ) flew into bankruptcy 19 months ago, it was a money pit with wings. Delta emerged on Apr. 30 transformed, having slashed its payroll, streamlined its fleet, and built out foreign routes so that 40% of revenues now come from higher-margin international traffic. Still, with the economy slowing and fuel prices rising, the nascent recovery of airlines like Delta may get nipped. See "Delta Gets a Lift on Its Credit Rating" Another Bourse Hookup Frankfurt's Deutsche Börse, whose romancing of partners has often been rebuffed, at last found a willing mate. On Apr. 30 it said it would pay $2.8 billion for New York-based International Securities Exchange (ISE). That's a nearly 50% premium, but a deal would boost DB's dominance of the fast-growing derivatives market. And unlike the London Stock Exchange, ISE is willing. Paris-based NYSE Euronext is rumored to be pondering a bid. Whitacre's Package AT&T CEO Ed Whitacre said goodbye on Apr. 27 after 44 years at the company. He built the nation's largest telco and now hands over the job to COO Randall Stephenson. He sure isn't leaving empty-handed: His retirement package comes to nearly $159 million. Additional perks include $24,000 in annual car benefits, $25,000 in country club fees, and lots of stock options, according to a proxy statement. See "Meet AT&Tıs New Boss" World Bank Scuffle After days of contrition, embattled World Bank President Paul Wolfowitz turned combative as he fought to keep his job. On Apr. 30 he dismissed as "bogus" allegations that he violated conflict-of-interest rules by helping his companion win a promotion and pay raise, but didn't rule out stepping down if cleared of wrongdoing. Sayonara, Kutaragi-San Zap! There goes Sony's Ken Kutaragi, papa of the PlayStation. On Apr. 26, Kutaragi, who built the unit from scratch, said he would step down by summer. His departure comes five months after his protégé, Kazuo "Kaz" Hirai, assumed day-to-day management of the $9 billion business. Sony (SNE ) hopes to turn the PS3 from a pricey gaming machine into the ultimate Net-linked entertainment system and revive the unit's profits. See "Game on for Sony PlayStation's New Chief" Nationalizations Of The Week During a rousing May Day ceremony featuring Russian MiG fighter jets and army troops, Venezuelan President Hugo Chávez seized control of remaining foreign-run oilfields and vowed to expand state command of the economy as part of his socialist revolution. "Today we have finally buried 10 years of oil opening [to foreigners]—the Orinoco oil belt is ours, free and sovereign!" Chávez told a red-shirted throng. ExxonMobil (XOM ), Chevron (CVX ), ConocoPhillips (COP ), BP (BP ), France's Total (TOT ), and Norway's Statoil (STAT ), which have invested a total of $17 billion in Venezuela, were forced to hand operating control of their projects to state monopoly PDVSA. Although their expertise as now-minority partners is needed to extract and upgrade the superheavy oil, some may pack their bags. Negotiations over compensation could prove sticky: Chávez said he may sue the oil giants for "damaging oil wells" and "violating their contracts." The fiery leader also announced Venezuela's withdrawal from the World Bank and International Monetary Fund and says he may bid adios to the Organization of American States. See "Chavez' May Day Takeover of Oil Assets"
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