Murdoch and DJ story changes again:
Murdoch's News Corp. May Have Votes for Dow Jones
By Leon Lazaroff
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Rupert Murdoch, chairman and CEO of News Corp.
July 31 (Bloomberg) -- Dow Jones & Co.'s Bancroft family may have handed Rupert Murdoch's News Corp. enough voting shares to clinch its $5 billion acquisition of the publisher of the Wall Street Journal, the New York Times reported.
Family members and trusts representing more than 30 percent of Dow Jones voting stock indicated to their lawyers that they support a sale of the New York-based company, the Times said late yesterday on its Web site. Some commitments weren't signed and the Bancrofts could still back away, the newspaper said, citing unidentified people briefed on the matter.
The family's decision, if it holds, clears the way for Murdoch to fulfill a longstanding goal of acquiring control of the Wall Street Journal, the second-largest U.S. newspaper publisher, giving him a financial news operation to buttress his television and newspaper holdings in the U.S., Europe and Asia. The company has been in Bancroft family hands for 105 years.
``It's a matter of reviving the Journal and spreading the brand,'' said Hal Vogel, a New York-based media analyst and author of ``Entertainment Industry Economics.'' ``Under Rupert Murdoch, there'll be so many opportunities to expand the brand around the world.''
The Wall Street Journal said today on its Web site that Dow Jones may agree to cover payments to the firms advising its majority owners on News Corp.'s buyout offer as an enticement to holdout family members who as of yesterday did not support the deal.
Assuming Liabilities
News Corp. would assume the liabilities, which could total at least $30 million, if the deal goes through, the Journal said, citing people familiar with the situation.
According to the Journal, News Corp.'s board is scheduled to meet at 4 p.m. today and Dow Jones's board intends to meet at 7 p.m.
Common shareholders with about 29 percent of the vote are expected to support the transaction in overwhelming numbers, the Wall Street Journal reported yesterday. Murdoch needs Bancroft support totaling at least 30 percent of the votes to assure a comfortable margin, the newspaper said.
News Corp. probably was able to secure enough votes to proceed with an offer for Dow Jones, the London-based Times newspaper reported today, citing sources it didn't identify. News Corp. owns the Times.
The $60-a-share price, worth about $1.23 billion to the family, represents a 65 percent premium to Dow Jones's closing price on April 30, a day before the bid was made public.
Share Price
The Bancroft vote may cause shares of Dow Jones, owner of Dow Jones Newswires, Barron's and MarketWatch, to rise today. They had dropped 13 percent since July 6 on speculation by investors that the Bancrofts may oppose the sale. The shares declined $2.89, or 5.3 percent, to $51.56 yesterday in New York Stock Exchange composite trading.
Bancroft family spokesman Roy Winnick last night declined comment on the New York Times story. News Corp. spokesman Andrew Butcher couldn't be reached. News Corp. shares rose 18 cents, or 0.8 percent, to $22.84 yesterday on the NYSE.
Dow Jones's board endorsed News Corp.'s offer on July 18 after Murdoch, 76, agreed to steps designed to protect the editorial independence of the Wall Street Journal.
The family, which controls 64 percent of Dow Jones's voting shares, split its vote and disagreed over whether Murdoch would meddle with news coverage. Bancroft trustee and Dow Jones board member Michael Elefante had set a deadline of yesterday for the family's decision.
Christopher Bancroft
Bancroft efforts to block the deal were led by Christopher Bancroft, an investment banker and director, and his cousin Leslie Hill, also a director. Bancroft had sought to attract hedge funds, private-equity firms and General Electric Co. to buy enough shares to prevent News Corp. from acquiring the company, the Journal reported on July 16.
Another Bancroft director, Elizabeth Steele, told family members the company would be better served as part of a larger media organization, the Journal reported.
Dow Jones would bolster News Corp.'s planned financial news channel and help lure advertisers from Fairfield, Connecticut- based GE's CNBC, said John Morton, an independent newspaper analyst in Silver Spring, Maryland.
Murdoch took a step toward an agreement in June when he committed to creating a five-person board to oversee the Wall Street Journal and the hiring and firing of its top editors. He has offered few specifics about his plans except to say Dow Jones reporting and journalists would appear on News Corp.'s cable-TV networks in Europe and Australia.
Competition
Absent a buyout, Dow Jones faces a declining newspaper advertising market and a rival with 10-fold greater sales after Thomson Corp. agreed to buy London-based Reuters Group Plc.
Thomson, based in Toronto, offered about $17.3 billion for Reuters in May. The two companies had combined revenue of $11.8 billion last year, compared with $1.78 billion for Dow Jones.
Bloomberg LP, parent of Bloomberg News, competes with the companies in providing financial news and information.
Murdoch's bid was opposed by the newspaper's employees' union and by James Ottaway Jr., whose family controls about 7 percent of the company's voting rights, according to the Journal. |
