Wall Street Journal: We Belong to Murdoch
News Corp. Secures Votes from Dow Jones’ Bancroft Family
By Mike Farrell -- Multichannel News, 7/31/2007 12:26:00 PM
News Corp. chairman Rupert Murdoch may have finally realized his dream to own The Wall Street Journal after the paper reported that the media giant has apparently secured enough votes from the Journal’s ruling Bancroft family.
According to the online edition of the Journal, Bancroft family members owning at least 38% of the vote of Dow Jones, the newspaper’s parent, voted in favor of News Corp.’s $5 billion buyout bid.
After weeks of back-and-forth negotiations -- with several family members vehemently opposed to a sale to News Corp. -- the media giant apparently secured the necessary votes by agreeing to cover costs incurred by the family (mainly for advisers) to evaluate the deal. The Journal estimated those costs to be about $30 million.
The Bancroft family controls about 64.2% of the votes of Dow Jones, but News Corp. needed roughly one-half of that to secure a deal. It is expected that the overwhelming majority of non-Bancroft-family shareholders would approve the News Corp. offer, which, at the time it was made in May, was a 60% premium to Dow Jones’ stock price. The Dow Jones board of directors approved the News Corp. deal July 17.
According to a Reuters report Tuesday, Dow Jones Indexes editor and executive director John Prestbo told reporters in Chicago that the Bancroft family has accepted the News Corp. offer and that Dow Jones “will be part of News Corp.” Reuters said Prestbo was citing an internal company memo.
Shares of Dow Jones rose 11.8%, or $5.87 per share, to $57.43 in early trading Tuesday, as news broke that a deal was closer to reality.
According to the Journal, News Corp. scheduled a 4 p.m. board of directors meeting Tuesday to discuss its next step. Dow Jones’ board is expected to meet later this evening, the Journal reported.
Gaining the Journal is expected to add significant cachet to News Corp.’s fledgling Fox Business Network, which is scheduled to launch in 30 million homes in October.
Still up in the air is whether the Journal will continue its relationship with cable business channel CNBC, which uses Journal reporters and editors throughout its programming lineup as part of an agreement that expires in about four years.
News Corp. could buy out the CNBC contract, but some reports have claimed that CNBC has no desire to let the Journal out of its contract.
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