Dow Jones Agrees to Murdoch Takeover
The Wall Street Journal is reporting that its parent company has agreed to be purchased by Rupert Murdoch's News Corp. This evening, the board of directors of Dow Jones & Co. will vote on whether to accept the $5 billion offer Murdoch made three months ago.
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LINDA WERTHEIMER, host:
Business news starts with an apparent deal to buy Dow Jones.
(Soundbite of music)
WERTHEIMER The Wall Street Journal is reporting that its parent company has agreed to be purchased by Rupert Murdoch's News Corp. This evening the Dow Jones board will vote on whether to accept the $5 billion offer Murdoch made three months ago. The controlling Bancroft family has so far balked at selling to Murdoch. Some family members searched for another buyer but it seems their efforts were in vain.
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News Corp. Strikes Tentative Deal For Dow Jones
Chairman and CEO of News Corporation Rupert Murdoch delivers a speech during the General Session at the 2007 Global Conference Sessions in Beverly Hills, California on April 24, 2007.
Chairman and CEO of News Corporation Rupert Murdoch delivers a speech during the General Session at the 2007 Global Conference Sessions in Beverly Hills, California on April 24, 2007.
The Wall Street Journal is shown on sale at Hudson News in Grand Central Terminal in New York.
The Wall Street Journal is shown on sale at Hudson News in Grand Central Terminal in New York.
Tabloid tycoon Rupert Murdoch's News Corp. has agreed to a tentative pact to buy Dow Jones & Co., publisher of The Wall Street Journal, the financial newspaper reported on its Web site.
After weeks of negotiations, the two companies reached an agreement in principle for the original $5 billion that Murdoch had offered. The proposal will go to Dow Jones' board of directors Tuesday evening for approval, the Journal said, citing unnamed people familiar with the situation.
The deal would still require an all-important nod from Dow Jones' controlling shareholders, the Bancroft family, which has been divided on a sale to News Corp. over concerns that Murdoch could compromise the Journal's editorial independence.
Christopher Bancroft, a Dow Jones director, recently has been approaching major stockholders in an attempt to buy enough shares of Dow Jones to block a sale.
Michael B. Elefante, the Bancroft family's lead trustee, has scheduled a meeting for Thursday to present the agreement to the family and is expected to give the family members several days to make a decision, the Journal reported.
Murdoch, News Corp.'s chairman, resisted pressure from Dow Jones to raise his initial offer of $60 a share, 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.
Dow Jones shares were down 40 cents to $56.55 at noon Tuesday, after closing Monday at $56.95, down 54 cents.
The Wall Street Journal, among the most widely read newspapers in the country, is the flagship of the Dow Jones publications. The company also publishes the financial magazine Barron's, a portfolio of community newspapers as well as stock market and other financial data. Its sales were $1.8 billion last year.
News Corp., significantly bigger and wealthier with $25 billion in sales last year, owns media products that include Fox News, the New York Post, and British tabloid The Sun.
Murdoch has long wanted to own The Wall Street Journal, which has tremendous clout in the business world and wins many prizes for editorial excellence. Murdoch has said he would invest in the newspaper's online and overseas operations, and tap its resources to 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 the quality of the paper's coverage and tilt its stories to suit his business interests.
The Bancrofts originally rebuffed Murdoch's approach but then reversed themselves and agreed to meet with him in early June to discuss their concerns about keeping the Journal's coverage free from corporate interference. The talks led to an agreement to create a committee that would have to approve the hiring or firing of top editors at the Journal.
Like several other newspaper publishers including The New York Times Co. and The Washington Post Co., Dow Jones is a public company but remains controlled by a family through a special class of shares with powerful voting rights.
From NPR reports and The Associated Press
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