Murdoch seen close to winning Dow Jones
Updated: 2007-08-01 08:36
NEW YORK - Rupert Murdoch appeared to be on the verge of clinching a deal to buy Dow Jones & Co., reportedly lining up sufficient support Tuesday to take over stewardship of The Wall Street Journal publisher from the family that has controlled it for more than a century.
 Gordon Crovitz, left, publisher of the Wall Street Journal, and Paul Steiger, the financial paper's managing editor, discuss the redesigned paper in the New York newsroom in this Jan. 2, 2007 file photo. [AP]  |
The deal would also expand Murdoch's already massive global media and entertainment empire News Corp., which owns the Fox broadcast network; Fox News Channel, the Twentieth Century Fox movie and TV studio; MySpace; newspapers in Australia and the UK; and several satellite TV broadcasters.
The Journal reported on its Web site Tuesday that a key Bancroft family trust had reversed itself and decided to support the deal, likely meaning that votes representing about 38 percent of Dow Jones' shareholder vote were now in favor of selling to Murdoch.
Combined with the 29 percent of Dow Jones shares that are publicly held and very likely to support Murdoch, the $5 billion deal appeared to have critical mass.
However, a Bancroft family spokesman cautioned that family members were still being polled about their positions and that it was too early to conclude that a particular level of support had been reached. The family controls a total of 64 percent of Dow Jones' vote through a complicated series of trusts.
The next step is for Murdoch's News Corp. to decide whether it has enough support from the Bancroft family to proceed. The media conglomerate wants to have well over a simple majority committed to the deal in order to avoid the risk of it falling apart later. News Corp.'s board was expected to meet Tuesday at 4 p.m., and Dow Jones' board was to meet later in the evening.
News Corp. hasn't said what it would consider to be a sufficient level of support for the deal, but a company spokesman said Monday that it was "highly unlikely" to proceed with the deal if support from the family remained at the level reported at that time - about 29 percent.
Dow Jones shares rose sharply Tuesday on hopes that a deal was close, and were getting closer to Murdoch's offering price of $60 a share, indicating growing confidence the deal will go through. Dow Jones shares rose $5.82, or 11.3 percent, to $57.38.
Members of the Bancroft family had a 5 p.m. deadline Monday to tell the family's lead trustee how they would vote, but negotiations apparently continued over other matters in an attempt to persuade holdout votes to sign on. The Journal reported Tuesday that Dow Jones' board had agreed to set aside funds to pay the Bancroft family's advisory fees, which could total at least $30 million.
Representatives of News Corp. and Dow Jones on Tuesday declined to comment on the continuing negotiations.
Over the past few weeks investors have been steadily pushing Dow Jones shares below the $60 price Murdoch has offered, reflecting increasing doubts about the deal going through.
The Bancroft family has been deeply divided over whether to sell to Murdoch, largely over concerns that his management style could affect the papers' coverage.
Murdoch says any concerns about corporate meddling in the Journal's news pages are unwarranted. News Corp. has agreed to create a committee that would have to sign off on any decision to hire or fire top editors at the paper.
In a lengthy letter to fellow family members last week, Bancroft descendant Crawford Hill urged them to vote for a sale, saying the family hadn't taken an active enough role in overseeing Dow Jones and was now "paying the price for our passivity over the past 25 years."
Dow Jones' board has tentatively approved the deal, and the final decision now rests with the Bancrofts. Besides several Bancroft family members, including Dow Jones director Christopher Bancroft, Murdoch's bid is also being opposed by former board member Jim Ottaway Jr., whose family controls 7 percent of the shareholder vote.
On Tuesday, Thomas Walker, who worked on the global copy desk at The Wall Street Journal, said outside of the Dow Jones building in lower Manhattan that he was quitting rather than see the paper sold to Murdoch. "I don't want to work for the man," he said.
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