aka Fox buys Wall Street Journal
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NEW YORK - Media baron Rupert Murdoch Tuesday clinched a $5 billion deal to take over the publisher of The Wall Street Journal, achieving his long-treasured goal of adding the esteemed business newspaper to his global stable of properties.
The board of Murdoch’s News Corp. approved the deal Tuesday evening, according to a person with knowledge of the negotiations.
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. 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.
News Corp. appeared to have won the support of at least 38 percent of the Dow Jones voting shares controlled by the Bancroft family, enough to ensure a comfortable margin of victory, The Wall Street Journal reported in its online edition.
“The Bancroft family has accepted,” John Prestbo, editor and executive director of Dow Jones Indexes, told reporters on Tuesday in Chicago. Dow Jones “will be part of News Corp.,” he said. Prestbo told Reuters the information came from an internal company memo.
Dow Jones stock surged 12 percent to near the offering price of $60 a share, reflecting rising confidence that the deal, which has appeared shaky in recent days, would be finalized.
However, a Bancroft family spokesman cautioned that family members were still being polled about their positions and that it was too early to conclude that a particular level of support had been reached. The family controls a total of 64 percent of Dow Jones’ vote through a complicated series of trust.
Independent shareholders, who control about 29 percent of the vote, are expected to vote overwhelmingly in favor of the deal, but News Corp. officials want commitments from at least half the Bancroft shares as well to assure a winning vote. Murdoch's offer represents a rich premium over the mid-$30s price Dow Jones shares had before the offer became public in early May.
The boards of both companies planned to meet Tuesday to discuss how to proceed. News Corp.’s board of directors set a meeting for 4 p.m. ET, and the Dow Jones board planned to meet at 7 p.m.
Official representatives of both companies declined to comment on the continuing negotiations.
The completion of the deal would give Murdoch a valuable asset ahead of the planned October launch of his new Fox financial news television network, which will compete with entrenched leader CNBC. CNBC has had a close relationship with the Journal over the years, including on-camera appearances by many Journal reporters.
(CNBC is a unit of NBC Universal, which also co-owns MSNBC.com in a joint venture with Microsoft Corp.)
A Monday deadline came and went with the Bancroft family representatives making no comment on how members would vote. But the two sides appeared to be edging closer to a final decision, according to reports in major news outlets.
The final sticking point involved the payment of legal and advisory fees, according to CNBC's David Faber.
On Monday a News Corp. spokesman said the company was “highly unlikely” to go ahead with the deal if the level of support among the Bancrofts had remained at just 28 percent of the shareholder vote, which was reported as the level of commitment as of Sunday.
Late negotiations reportedly centered on whether News Corp. would pay the Bancroft family’s advisory fees — which could total at least $30 million — if it received the support of at least one of two key holdout shareholders. The support of those holdouts would seal the deal, the Journal reported.
The Journal, which cited unnamed people familiar with the situation, said neither of the shareholders had agreed as of late Monday.
The Bancrofts are a diverse clan spanning several generations and their voting interest in the company is held through a complex series of privately held trusts, making the outcome difficult to predict. The family has been deeply divided over whether to sell to Murdoch, largely over concerns that his brash style could affect the coverage of one of the nation's most respected newspapers.
Murdoch says any concerns about corporate meddling in the Journal’s news coverage 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.”
Dow Jones’ board has tentatively approved the deal, and the final decision now rests with the Bancrofts. Besides several Bancroft family members, including Dow Jones director Christopher Bancroft, Murdoch’s bid is also being opposed by former board member Jim Ottaway Jr., whose family controls 7 percent of the shareholder vote.
Murdoch says any concerns about corporate meddling in the Journal’s news coverage 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.”
Dow Jones’ board has tentatively approved the deal, and the final decision now rests with the Bancrofts. Besides several Bancroft family members, including Dow Jones director Christopher Bancroft, Murdoch’s bid is also being opposed by former board member Jim Ottaway Jr., whose family controls 7 percent of the shareholder vote.
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Excellent
Every liberal blog is bitching about this. It's great. The Journal has always been pretty good, the reason this is important is because it means Fox is expanding properly into business news. They're launching a business channel sometime soon - which is sorely needed to bring the pain to CNBC which has been nothing short of horrible. And with the WSJ behind them it'll make the launch that much easier.
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