Murdoch's Wall Street Journal?

July 17, 2007
Dow Jones and Murdoch Said to Move Close to Deal

By RICHARD PÉREZ-PEÑA and RICHARD SIKLOS
Rupert Murdoch reportedly moved a major step closer to achieving his long-standing aim of acquiring The Wall Street Journal when Dow Jones & Company tentatively agreed to be acquired by Mr. Murdoch’s News Corporation yesterday.

But the deal still must win the approval of the Bancroft family, which controls a majority of the company’s voting stock and has balked so far at selling to Mr. Murdoch, with some family members instead searching for another buyer.

According to a report on The Journal’s Web site, representatives of Dow Jones accepted Mr. Murdoch’s $60-a-share bid, which values the company at $5 billion. The News Corporation and Dow Jones declined to comment.

The agreement was expected to be put to the board tonight, and would cap a three-month effort by Mr. Murdoch to add Dow Jones to his global media empire.

The Bancrofts have shown great ambivalence throughout the process. They initially rejected Mr. Murdoch’s offer, then weeks later agreed to hear from News Corporation and any other potential bidders.

The reported deal may put pressure on the family to come to a resolution, because it suggests that management and the board believe that the offer should be accepted and, by implication, that it is a better option than going it alone.

Still, handicapping a vote by the Bancrofts is made more difficult because most of their shares are held in dozens of family trusts. In most cases, a trust can sell only if its three trustees vote to do so.

The family demanded, as a condition of considering a sale, a binding agreement that would limit News Corporation’s ability to hire and fire the top editors of The Journal and Dow Jones Newswires, which would, in turn, limit Mr. Murdoch’s ability to control their content. But it has not been clear whether the editorial integrity pact negotiated weeks ago by Dow Jones and News Corporation will meet with the family’s approval.

Mr. Murdoch and some of his top finance and legal aides met yesterday with Richard F. Zannino, chief executive of Dow Jones, and other representatives of his company. The Dow Jones board is scheduled to meet today, and The Journal reported that the deal will be presented to them then, at the $60-a-share price Mr. Murdoch originally offered.

That offer was a steep premium for a stock that had been trading at about $36 when before the News Corporation bid became public knowledge on May 1.

News Corporation is one of the world’s largest media companies, with newspapers on three continents, Fox News Channel, multiple satellite television franchises and other properties.

It plans to start an all-business cable television channel in October, to compete with CNBC, and its executives see Dow Jones — owner of The Journal, Dow Jones Newswires, Barron’s, MarketWatch and other properties — as a source of ready content and credibility for that new channel.

Mr. Murdoch first made his offer in a breakfast meeting with Mr. Zannino on March 29, and put it in writing in a letter to the Dow Jones board on April 17.

His offer has drawn protests from many newsroom employees. But others have questioned how well Dow Jones would continue to fare on its own.

The Bancroft family owns less than one-quarter of Dow Jones shares, but most of those have supervoting rights, giving them 64 percent of the voting power as of February, according to the company’s last public accounting of their holdings.

Copyright 2007 The New York Times Company