Board of Dow Jones OKs sale to Murdoch
It will recommend that the controlling Bancroft family likewise agree to it. But their approval is not a given.
NEW YORK - Media baron Rupert Murdoch cleared another hurdle on his way to owning the Wall Street Journal late yesterday when the board of Dow Jones & Co., the Journal's parent company, said it would sign off on a sale to Murdoch's News Corp. for $5 billion.
Dow Jones said in a statement that its board was prepared to recommend a proposal for News Corp. to acquire Dow Jones for $60 a share in cash, the price Murdoch has offered. Some shareholders could elect to receive News Corp. stock.
However, the deal has yet to overcome its largest obstacle: approval by the mercurial Bancroft family, Dow Jones' controlling shareholders. The family initially rebuffed Murdoch's offer in early May, only to reconsider later.
The family has controlled the storied newspaper publisher for more than a century and views it as a public trust. It insisted on, and received, a commitment to create an oversight board that must approve the hiring or firing of top editors at the Journal.
With board approval cleared, the deal will be presented to family members, most likely on Monday, and they will have several days to consider it. The family, which has some three dozen adult members spread across the country, has been deeply divided over whether to sell to Murdoch.
Two family members who are Dow Jones directors have been seeking to thwart Murdoch, the Journal reported, but neither appeared close to succeeding.
Christopher Bancroft has reached out to investors to buy enough shares of Dow Jones to block a sale, and Leslie Hill has been trying to find other buyers, according to the Journal. Bancroft didn't return a call for comment, and no phone number was listed for Hill.
The Journal reported on its Web site that Bancroft left last night's board meeting early and that Hill abstained from the vote, as did another board member, German publishing executive Dieter von Holtzbrinck. A Dow Jones spokeswoman declined to comment.
Together the family controls 64 percent of the shareholder vote, but so many different family members and trusts are involved that it was difficult to predict how the family dynamics would play out.
News Corp. issued a statement late yesterday saying it was "grateful" to Dow Jones' board for its "strong vote of support" in favor of its offer.
Last week, Dow Jones negotiators met with supermarket billionaire Ron Burkle and Web entrepreneur Brad Greenspan to explore a counteroffer to Murdoch's, but no concrete offer has emerged.
Murdoch has said concerns that he would meddle with the Journal's coverage are unwarranted. He has been mainly silent about the process, but expressed frustration about the drawn-out negotiations last week, telling the Associated Press at a conference for media CEOs in Idaho that the Bancrofts "keep changing their minds."
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 to further his business interests.
Jim Ottaway Jr., a former Dow Jones board member, also has been a vocal opponent of the deal, saying he is concerned about the Journal's newsroom remaining independent. Ottaway said in an interview yesterday that he and his brother David, who together control about 7 percent of Dow Jones' vote, would oppose Murdoch.