Report Say Murdoch Reaches Tentative Deal To Buy Dow Jones
Tuesday, July 17th 2007, 7:02 am
By: News On 6
NEW YORK (AP) _ Rupert Murdoch moved closer to snagging Wall Street Journal publisher Dow Jones & Co. with a tentative agreement to buy the company for his original offering price of $5 billion, the Journal and The New York Times reported Tuesday.
The deal rests, however, on approval from Dow Jones' controlling shareholders, the Bancroft family, which has been deeply divided over a sale to Murdoch on concerns of editorial independence and integrity at the storied paper.
The Journal reported that the tentative deal in principle would go to Dow Jones' board late Tuesday. Representatives for Dow Jones and News Corp., Murdoch's media conglomerate, didn't return calls seeking comment early Tuesday.
Christopher Bancroft, a Dow Jones director, has reached out to major stockholders to buy enough shares of Dow Jones to block a sale, the Journal has reported.
Michael B. Elefante, the Bancroft family's lead trustee, has scheduled a meeting for Thursday to present the agreement to the family, and he is expected to give the family members several days to make a decision, the Journal reported.
Murdoch resisted pressure from Dow Jones to raise his initial $60 a share offer, which represented a premium of about 65 percent over the mid-$30s level that Dow Jones stock was trading at before the proposal became public in early May. Shares closed at $56.95 Monday.
Murdoch has longed to own the Journal, along with its clout on Wall Street and a history of outstanding journalism. Murdoch has said he would invest in the Journal's online and overseas operations, and help build a business-themed cable news channel that would rival General Electric Co.'s highly profitable CNBC network.
A union representing Journal reporters and other Dow Jones employees has objected to Murdoch's bid, saying he would downgrade news coverage and interfere with newsroom independence for his own business interests.
The Bancrofts originally rebuffed Murdoch's approach but then agreed to meet with him in early June. The two sides agreed to form a committee that would approve the hiring or firing of top editors at the Journal to ensure independence.
Dow Jones directors have been searching for rivals to Murdoch's $5 billion bid, but it seemed unlikely that anyone can top it.
A committee of Dow Jones directors, including a representative of the Bancroft family, met last week with supermarket billionaire Ron Burkle and Web entrepreneur Brad Greenspan, but no counteroffer has emerged.
Besides the Journal, Dow Jones also owns Dow Jones Newswires, the Factiva news database, Barron's, a group of community newspapers and several well-known stock market indicators including the Dow Jones industrial average.
News Corp. owns the Fox broadcast network, Fox News Channel, newspapers in the United Kingdom, Murdoch's native Australia and the New York Post, the Twentieth Century Fox movie and TV studio and MySpace, the online social networking site.
The Bancroft clan trace their ownership of Dow Jones to Clarence Barron, a Dow Jones correspondent who bought control of the company in 1902. Over the years, their ties to Dow Jones have become more remote. No family member is involved in day-to-day operations, but the Bancrofts control the company through a special class of shares.