Apropos postings here a week or two back concerning techniques of pumping and dumping. I am currently reading the biography of Kerry Stokes and in it author Andrew Rule recounts Rupert Murdoch's negotiations when he was looking at buying the Herald and Weekly Times:
"On a Monday in late November 1979, Rupert Murdoch and one of his directors, Ken May, called on Keith Macpherson, chairman and chief executive of the Herald & Weekly Times newspaper empire. It was not a social call. They told him News Limited was launching a takeover bid as soon as the market opened that day.
"When news broke about the News Limited raid, some saw it as Murdoch preparing to 'take back' the grand old newspaper group once associated with his father.
""Now it seemed, Murdoch junior was set to come riding back into town - much to the satisfaction of his mother, Dame Elisabeth - to take down those who had once derided him behind his back as 'The Young Pretender'.
"By that November day in 1979, there was an atavistic undertow to Rupert's tilt at the old firm that caught attention, if not sympathy. But it wasn't to last long. Within a couple of days, Murdoch the pragmatist trumped Rupert the romantic. It soon became clear his bid was not going to succeed. But that didn't matter, really: he had conjured up an audacious tactic perhaps best summed up as 'Heads I win, tails you lose'.
"When the market opened that Monday, Murdoch bid $4 a share for shares that had been trading at $2.70. He made it known he was looking for half of the 63 million Herald shares on issue, and commissioned JBWere to buy them.
"Millions of shares changed hands, but by the lend of the day Murdoch realised he could not force his way into controlling the company because Queensland Press and Fairfax were playing 'white knights' to rescue the Herald & Weekly Times. Fairfax mainly wanted to protect its interest in The Age, which far preferred to maintain its cosy competition with the Herald & Weekly Times than with a hostile News Limited. Stokes would later comment, 'Egos made strange bedfellows'.
"Fairfax threw millions at the market and secured enough shares to rebuff Murdoch, but made what Stokes calls a 'technical error' of flagging their intentions ahead. While the rescuers were buying with both hands, eyes wide shut Murdoch sold them a dummy. Suddenly and silently, he started selling - but not through JBWere, the firm that had done the buying for him. Instead , he quietly briefed another stockbroker, May & Mellor.
"Before anyone at Flinders Street - or at Fairfax's Sydney office or Queensland Press - realised what was happening, May & Mellor had quietly unloaded Murdoch's 3.5 million Herald shares at a premium : $5.52 per shares. By midday of day two, the shares had slip back to $3.75 and Murdoch had announced he was out of the race, at least for the time being. But he had made $3 million cash between breakfast and lunch"
MM
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