One of the Reasons America does not have a Free Press
Source: News Corp. Backs Dow Jones Deal
Tuesday July 31, 8:43 pm ET
By Seth Sutel, AP Business Writer
Source: Murdoch's News Corp. Board Approves Deal to Buy Dow Jones & Co. for $5 Billion
NEW YORK (AP) -- Rupert Murdoch edged closer to his goal of owning Wall Street Journal publisher Dow Jones & Co. as the board of his News Corp. media conglomerate signed off on the $5 billion deal, a person with knowledge of the matter said late Tuesday.
The board of Dow Jones & Co. was meeting Tuesday evening to give final consideration to the deal, but there was no word on a decision yet, and a company spokeswoman declined to comment.
A person familiar with the situation said News Corp.'s board signed off on the deal Tuesday, but this person asked for anonymity because the vote had not yet been made public.
If he succeeds, Murdoch would get one of the great trophies of U.S. journalism and a newspaper that is considered required daily reading among the business and power elite.
The deal would 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.
News Corp. had said it would only agree to move ahead if the deal had sufficient support from Dow Jones' controlling shareholders, the Bancroft family.
The Journal reported on its Web site Tuesday that a key Bancroft family trust had reversed itself and decided to support the deal, meaning that votes representing about 37 percent of Dow Jones' shareholder vote were now in favor of selling to Murdoch.
Combined with the 29 percent of Dow Jones shares that are publicly held and very likely to support Murdoch, the deal appeared to have critical mass.
Dow Jones shares rose sharply Tuesday on hopes that a deal was close, and were getting closer to Murdoch's offering price of $60 a share, indicating growing confidence the deal will go through. Dow Jones shares rose $5.82, or 11.3 percent, to close at $57.38. They gained another 47 cents in after-hours trading.
The Journal reported on its Web site Tuesday that a key Denver-based family trust agreed to the deal after Dow Jones' board had agreed to set aside funds to pay the Bancroft family's advisory fees, which could total at least $30 million.
The Bancroft family, which collectively holds 64 percent of Dow Jones' vote, was deeply divided over selling to Murdoch, and some members actively sought alternatives to his bid. They, a union representing Journal reporters and former board member Jim Ottaway Jr. expressed concerns about potential meddling in the Journal's news coverage.
German publishing executive Dieter Von Holtzbrinck resigned as a director of Dow Jones two weeks ago after the board tentatively signed off on the deal, saying he was worried about how the Journal would fare under Murdoch.
Murdoch says any concerns about corporate meddling in the Journal's news pages are unwarranted. News Corp. has agreed to create a committee that would have to sign off on any decision to hire or fire top editors at the paper.
In a lengthy letter to fellow family members last week, Bancroft descendant Crawford Hill urged them to vote for a sale, saying the family hadn't taken an active enough role in overseeing Dow Jones and was now "paying the price for our passivity over the past 25 years."
On Tuesday, Thomas Walker, who worked on the global copy desk at The Wall Street Journal, said outside of the Dow Jones building in lower Manhattan that he was quitting rather than see the paper sold to Murdoch. "I don't want to work for the man," he said.
Associated Press Writer Sonia Moghe contributed to this report.