Bancrofts agree to sell Wall Street Journal to Murdoch
Media baron Rupert Murdoch's News Corp has won its $5-billion bid to buy the Wall Street Journal and the Dow Jones Company.world Updated: Aug 01, 2007 02:47 IST
Media baron Rupert Murdoch's News Corp has won its $5-billion bid to buy the Wall Street Journal and the Dow Jones Company after key members of the controlling Bancroft family agreed to the deal following protracted negotiations, the Wall Street Journal reported Tuesday.
The move gives Murdoch the support of at least 38 percent of the voting shares owned by the Bancrofts, an amount considered more than enough to approve the deal. Institutional investors who control the remaining shares strongly support the deal, which represents a 67 percent premium on share price of the Dow Jones Company before the offer was made public.
Prominent members of the Bancroft family had held out against the deal for fear that the aggressive media mogul would compromise the paper's renowned editorial independence. However, after rival suitors failed to match the News Corp offer, and Murdoch committed to an independent editorial board, key members of the family threw their votes behind the deal.
The buyout is expected to easily pass a formal shareholders' vote, allowing Murdoch to add one of the most respected brands in journalism to his corporate stable. News Corp already owns the Fox Network, Sky Broadcasting and the Times of London.
Its integration of the Wall Street Journal and the Dow Jones Company will be a massive boon to its planned business news cable channel. Murdoch has also said he plans to aggressively expand the paper's international editions.
According to Tuesday's report, the turning point in the protracted standoff came when the key Bancroft trust changed its mind and decided to accept News Corp's $60 per share offer for the newspaper publisher.
The trust, overseen by a Denver law firm, holds 9.1 percent of Dow Jones's voting shares and had been holding out for a higher offer from News Corp. But the media giant refused to raise its price and signalled its intention to abandon the offer, putting pressure on the Denver trust to back down.