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GE, Pearson bow out of Dow Jones talks

NEW YORK - Rupert Murdoch deliberately priced his $5 billion offer for Dow Jones & Co. so high that others would find it tough to beat. On Thursday, two other potential bidders essentially proved his point by dropping out of the running.

General Electric Co. held preliminary talks with Pearson PLC, a London-based company that publishes the Financial Times newspaper, about possibly combining GE's business news channel CNBC with the FT and Dow Jones.

But Thursday, Pearson's CEO Marjorie Scardino - who is from Texas - told the FT's staff that while Pearson had ''kicked around some ideas'' about a three-way deal, ''we didn't see that combination stacking up for our shareholders.''

Murdoch's offer of $60 a share for Dow Jones represents a massive premium of about 65 percent over the levels that Dow Jones shares had been trading prior to the offer becoming public in early May. Many on Wall Street believe the price is too high to be matched by other bidders.

News of the withdrawal by Pearson and GE sent Dow Jones shares down by nearly $1 Thursday, but they quickly recovered to the level they had been before the midday announcement from GE. In afternoon trading Dow Jones shares were off 58 cents at $60.07.

With GE and Pearson out, no other serious bidders are currently in sight for Dow Jones. Supermarket billionaire Ron Burkle has agreed to work with a union representing Dow Jones employees about finding a possible alternative to Murdoch, but so far nothing has emerged.

Murdoch, who built News Corp. into a major media conglomerate that spans the globe, has long wanted to own the Journal, a prestigious, prize-winning newspaper that carries tremendous clout in the business world.

Also, gaining control of Dow Jones would bolster Murdoch's plan to launch a financial cable news channel that would compete with CNBC, which is a unit of GE's NBC Universal subsidiary.

A union that represents Dow Jones employees and a former Dow Jones board member say they fear the Journal's quality would suffer under Murdoch, however, and that he might bend the paper's coverage to suit his business interests. Murdoch says those concerns are unjustified.