Dow Jones agrees to be bought by Murdoch
(AP)Updated: 2007-08-01 20:30
NEW YORK - Rupert Murdoch has sealed a deal to buy Wall Street Journal publisher Dow Jones & Co. for $5 billion, ending a century of family ownership and adding a crown jewel to his global media empire, News Corp.
 Copies of the Wall Street Journal and the New York Post are displayed at a New York kiosk in June 2007. Rupert Murdoch's News Corp. appears to have won sufficient backing from members of the Bancroft family to secure its takeover bid for Dow Jones Co., The Wall Street Journal reported online Tuesday.[File] |
The companies said in the wee hours of Wednesday morning that they signed a definitive merger agreement after the deal won sufficient support to pass from a deeply divided Bancroft family, which has controlled the storied newspaper publisher for generations.
Murdoch is getting one of the great trophies of US journalism and a newspaper that is considered required reading among the business and power elite.
The deal will 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 U.K., and several satellite TV broadcasters.
Dow Jones and News Corp. said in a statement that Bancroft family members and trustees representing 37 percent of the company's shareholder vote have agreed to support the deal. Combined with the 29 percent of the vote held by public shareholders, who are very likely to support Murdoch, the deal is now assured of passing.
The companies said a member of the Bancroft family or another mutually acceptable person would be appointed to News Corp.'s board of directors as part of the agreement.
The Bancroft family, descended over several generations from an early owner of Dow Jones, Clarence Barron, clashed long and hard over whether to sell to Murdoch, with several members saying they feared the quality and independence of the paper would suffer under his watch.
Some family members actively sought alternatives to Murdoch - without success. One of them, Leslie Hill, quit Dow Jones' board Tuesday as the deal edged toward completion, the Journal reported. Two weeks ago, another director quit in protest, German publishing executive Dieter von Holtzbrinck.
In a statement released early Wednesday morning, a family spokesman said: "It is our most fervent hope that in the years to come, The Wall Street Journal will continue to enjoy, and deserve, the universal admiration and respect in which it is held all over the world."
The Bancroft family initially rebuffed Murdoch in early May, but then agreed to reconsider. Last week they heard exhaustive presentations on Murdoch's plans but remained divided.
Wrangling continued past a Monday deadline for them to signal their intentions, and on Tuesday the break came when a holdout trust agreed to support the deal, apparently after Dow Jones agreed to pay the family's advisers' fees, the Journal reported.
Murdoch had long been interested in owning Dow Jones, but
it was widely assumed that the Bancroft family wouldn't sell. In the end, his
price of $60 per share - a good 65 percent over the level of Dow Jones' shares
before his offer became public - proved too rich to turn down.
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