Problem
In July 2007, News Corp. entered into an agreement to purchase all of the outstanding shares of Dow Jones and Company for $60 per share. Immediately prior to the News Corp. bid, the shares of the Dow Jones traded at $ 33 per share. The number of outstanding shares at the time of the announcement was 82 million. The book value of interest bearing liabilities on the balance sheet of Dow Jones was $ 1.46 billion.
i. Estimate the cost of this acquisition to the shareholders of News Corp.
ii. What value did News Corp. place on the control of Dow Jones and Company?