Who Else Wants Dow Jones?

Media tycoon Rupert Murdoch may need to shell out more cash if he wants to take hold of Dow Jones(DJ).

The publisher of The Wall Street Journal saw its shares soar 14% Friday on word that its controlling shareholders -- members of the Bancroft family -- are willing to entertain offers for the New York-based company.

The family's turnaround paves the way for a meeting with Murdoch, and some observers expect another bidder to emerge. Friday's action suggests Wall Street doesn't believe Murdoch's initial $60-per-share offer will carry the day.

But will Murdoch really be willing to boost an offer that already gives shareholders a 67% premium to their pre-offer stock price? And who else might be in the running?

"I have to assume that from the beginning that Mr. Murdoch didn't believe that the first bid would be grabbed," says Edward Atorino, managing director at the broker-dealer firm Benchmark, who covers Dow Jones.

Atorino believes that Murdoch's offer could be raised by as much as $10.

Shares in Dow Jones surged $7.71 to $61.01.

The family has hired Merrill Lynch(MER), which also owns about a 2% stake in the news organization, to evaluate its options. An external spokesman for Dow Jones declined to comment beyond the Bancroft family's announcement that it was open to offers and would have a sit-down with Murdoch.

Murdoch, however, might be disinclined to raise the bid for the company if no one else steps up, regardless of the run-up in the stock.

A spokesman for News Corp., who declined to make Chairman and CEO Murdoch available for comment, pointed to the billionaire's statements early last month. Murdoch called the News Corp. offer a "full and more than fair price" during a third-quarter earnings call.

Media honcho Mort Zuckerman, chairman and co-publisher of the New York Daily News, tells TheStreet.com that Murdoch has set the bar high with his offer while leaving the door open for others to make a play for Dow Jones. "It's a wide-open field, but there's a high hurdle to enter this race," he says.

Zuckerman's view is that Murdoch's desire to own the Wall Street Journal and Barron's might compel him to come in with a killer offer to close the deal once and for all.

Murdoch's move comes at a time when media operations, particularly print news publications, are facing increasing competition and low profits. For the Australian-born Murdoch, Dow Jones allows for a further strengthening of his global media enterprise, which already includes lucrative enterprises such as the Fox movie, television and news businesses.

Other investors haven't stepped up so far. It could be that some have been waiting on the sidelines, given the belief that the Bancroft family -- which owns some 65% of the Class B voting shares in Dow Jones -- wasn't interested in being bought out. The family's apparent willingness to deal now might open the door for others to walk in with sweeter deals.

But it's hard to know who else will be willing to tackle a Dow Jones purchase. Even given the prodigious dollars private equity has been plowing into buyouts, Dow Jones doesn't look like a natural LBO candidate. After all, the newspaper business is barely growing, and profit margins are perilously thin. Cost-cutting doesn't appear likely to generate huge benefits at the image-conscious Journal.

The number of strategic investors that could view Dow Jones as a good fit also appears thin.

Published reports suggest that other possible contenders could be Bloomberg, General Electric (GE) or Hank Greenberg, the former head of American International Group(AIG), though both Bloomberg and GE have publicly denied any interest.

Zuckerman, for his part, said he had no interest in bidding for Dow Jones either.

Benchmark's Atorino toyed with the notion that a Google(GOOG) or wealthy individuals such as Microsoft's (MSFT) Bill Gates might have an interest. Both deals, at first blush, sound like long shots.

But then again, with so much capital swirling around, maybe anything is possible.

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