News Corp looks set to win Dow Jones
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By Robert MacMillan and Kenneth LiNEW YORK (Reuters) - Rupert Murdoch's News Corp. looks set to reach a definitive agreement to buy Dow Jones &Co. Inc. later on Tuesday after apparently receiving support from enough members of the Bancroft family.A senior executive at Dow Jones said he had received an internal e-mail that said the Bancrofts, who control the company's voting shares, had agreed to the $5 billion deal."Up-to-date purchase news: it appears that the Bancroft family has accepted and we are going to be part of News Corp. That just in," John Prestbo, editor and executive director of Dow Jones Indexes, told reporters in Chicago.Dow Jones shares rose 11.3 percent to $57.4 in anticipation of the deal, trading closer to Murdoch's bid price of $60.The Wall Street Journal, which is owned by Dow Jones, reported that Bancroft family members holding 32 percent of the overall voting shares had agreed to support the deal.That would represent half the 64 percent voting shares held by the family. Outside shareholders own 29 percent of voting shares and are expected to overwhelmingly support the deal.The Journal, citing unnamed sources, said one previous holdout, a trust overseen by a Denver law firm representing 9.1 percent of voting shares, had changed its position and agreed to back the deal.It was unclear if the firm would vote all its shares for the deal.A Bancroft family spokesman declined to give any details on the vote tally, saying "any suggestion that the process has been completed and/or that a particular level of support has been established is at this point premature."Dow Jones also declined to give details, and a spokeswoman for the company said there was no internal memo on the deal.News Corp. and Dow Jones are expected to reach a definitive deal by Tuesday evening, capping Murdoch's three-month pursuit of the company, a source familiar with the matter said.The Bancrofts have been deliberating over whether to accept Murdoch's buyout bid, first announced in early May.Some members of the family had said they opposed Murdoch's bid because they believed he would interfere with Dow Jones's news operations. Others were seeking an even richer premium than the 65 percent offered by News Corp.Dow Jones is discussing a plan to have News Corp. cover the legal fees incurred by the Bancroft family, amounting to at least $30 million, the Journal reported on Monday.MEETINGS SCHEDULED"After all the high-minded concerns about editorial interest and journalistic excellence, it gets down to who pays the legal fees for the Bancrofts," Benchmark & Co. analyst Ed Atorino said."And some of the trustees bailed, fearing they'd get sued by some of the younger trust beneficiaries if they voted against the deal -- so much for principles."News Corp.'s board of directors is expected to discuss the deal at 4 p.m. EDT Tuesday, one source said.The Dow Jones board is expected to meet at 7 p.m., another source familiar with the discussions said.Steven Yount, president of the Dow Jones employee's union, said the union was disappointed."We were heartened that several prominent Bancroft family members remain opposed to the sale on grounds that it will irreparably damage the quality and independence of The Wall Street Journal and all Dow Jones publications," he said.On Monday, a News Corp. spokesman said Murdoch was "highly unlikely" to proceed with the offer unless more than a reported 28 percent of the voting shares owned by the Bancroft family supported the deal.Representatives of News Corp. and Dow Jones were not immediately available for comment on Bancroft support.Dow Jones shares were up 11.44 percent at $57.46 in afternoon trading on the New York Stock Exchange.Reuters competes with the Dow Jones Newswires.(Additional reporting by Sam Nelson in Chicago and Megan Davies in New York)
(c) Reuters 2007. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.
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