Dow Jones Shares Should Stand Tall

Investors who bounded into Dow Jones' (DJ Quote) stock after they learned of Rupert Murdoch's masterful offer to buy the company on Tuesday now find themselves wondering if the Bancroft family has more backbone than they thought.

After Wednesday's board meeting at the venerable New York publisher, Dow Jones said that shares representing 52% of the company's overall voting power are opposed to the $5 billion buyout offer from Murdoch's media empire, News Corp. (NWS Quote), and its directors will take no immediate action on the bid.

Suddenly, the $5 billion offer that couldn't be refused is starting to look like an offer that has been refused -- at least for the time being. Still, it's clear that Murdoch isn't going anywhere anytime soon.

Meanwhile, there may be downside in shares of Dow Jones as the jockeying begins, but the stock is likely headed for a net gain, thanks to Murdoch's dark-horse gamble.

To be sure, the godfather of the global media business has always been lurking. Murdoch has made no secret of his lust for The Wall Street Journal, Dow Jones' flagship property, and he has offered to buy it before at even higher prices than his latest $60-a-share bid, which represented an incredible 67% premium to where the stock closed on Monday. Even if the 76-year-old media maven should be laid to rest tomorrow, the richness of his offer is itself a testament to the strength and longevity of his own family business.

"There aren't many CEOs that can convince their board of directors to pay that kind of premium for an asset that's in a declining industry," says Jeff Matthews of Ram Partners. "News Corp. will pay a huge multiple for Dow Jones because it's a unique property that it has always wanted, and it will continue to want it until it gets it."