New York City Mayor Michael R. Bloomberg went into spin control Wednesday, but not because of issues facing the country's largest city, rather concerning rumors that the financial information company that bears his name may be on the block. Bloomberg admitted that he had been approached by potential bidders — most likely private equity firms — but as in the past he again decided not to sell.
However, Breakingviews says that while Bloomberg's earlier resistance to selling has proved savvy, he may be missing the boat this time around. Buyout firms are flush with cash, and looking for anything to purchase making Bloomberg a perfect target because of its steady stream of revenue, according to Breakingviews. Indeed, Breakingviews makes a good point concerning buyout firms. Over the summer, there were a slew of financial media deals. The most notable were Elevation Partners' purchase of a 40% stake in Forbes Media, and Pearson's $193 million purchase of privately-held Mergermarket.com, a British financial news service. While Forbes was the only prize to come close to the size of Bloomberg, which a New York Times story suggests would sell for up to $12 billion, the deal suggests there is a growing interest in the sector among both buyout firms and strategic bidders.
So who would have the capital to pay $12 billion? The Times suggests that buyout firms Blackstone Group and KKR and strategic bidders McGraw Hill and Thomson are the likely bidders. Of course, other strategic bidders could include Dow Jones and even Financial Times publisher Pearson. However, Dow Jones might have some antitrust issues to work through — namely its co-ownership of CNBC with NBC Universal. Dow Jones likely would either have to divest CNBC or Bloomberg TV. Nonetheless, Dow Jones' decision to buyout Factiva joint venture partner Reuters, the owner of Bloomberg's main rival Telerate, suggests it could be positioning itself for a bid for Bloomberg.
Bloomberg's refusal to sell puts into question his future political aspirations. Because of term limits, he will be forced to leave office in 2009. He's gone on the record to say that when he leaves City Hall, he doesn't expect to return to Bloomberg, but rather plans on becoming a professional philanthropist. Considering he owns 72% of Bloomberg, he'd have a lot of cash to donate to some worthy causes. —Matthew Wurtzel
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