Dow Jones Wins MarketWatch

It will pay $18 a share, or about $519 million.

Author:: TSC Staff
Publish date:: Nov 15, 2004 6:42 AM EST

Dow Jones

(DJ)

won the auction for

MarketWatch.com

(MKTW)

, striking a definitive agreement to acquire the online financial news provider for $18 a share, or about $519 million.

The purchase price comes out to $463 million net of MarketWatch's cash, or 4.8 times next year's expected sales.

The

Wall Street Journal

publisher prevailed over competing offers from

Yahoo!

(YHOO)

Viacom

(VIAB) - Get Report

and

New York Times

(NYT) - Get Report

. Viacom already owns about 22% of MarketWatch, as does

Pearson

of the U.K.

MarketWatch shares closed Friday at $16.79. They were trading at about $13 when news of the auction was originally published in late October, and were as low as $9 in late August. The company is expected to earn 15 cents a share this year and 39 cents a share next year, according to Thomson First Call.

The definitive agreement was unanimously approved by a committee of MarketWatch's board. MarketWatch said it adopted a stockholders' rights plan in connection with the transaction.

"The adoption of the stockholder rights plan is not intended to preclude a superior offer for acquisition of MarketWatch, but rather to make it difficult for any third party to interfere with any transaction approved by the MarketWatch board," it said.

MarketWatch is a competitor of this Web site.