Los Angeles billionaire Ron Burkle has joined a union representing Dow Jones & Co. employees to try to formulate a counter-offer to a $5 billion bid for the company from Rupert Murdoch's News Corp., a union official said.
The union, the Independent Association of Publishers' Employees, said earlier that it had retained advisers to seek alternative bids that could better protect the Wall Street Journal's "unquestioned journalistic integrity." The Journal is published by Dow Jones.
Burkle has told the union that he's interested in working with it to put together an offer, said Steven Yount, a representative for the Independent Association of Publishers' Employees (IAPE), which represents 2,000 Dow Jones workers.
The union has also reached out to Warren Buffett on a potential counter-offer for Dow Jones, but has not received a response yet, Yount said.
Burkle was part of an unsuccessful bid for publisher Tribune Co. earlier this year.
Last year Burkle accused Jared Paul Stern, a writer for the New York Post's Page Six gossip section, of demanding $100,000 and a $10,000 monthly stipend to make negative stories about him stop appearing in the paper. The New York Post is owned by Murdoch's News Corp.
Stern has repeatedly denied such an extortion attempt, and federal authorities declined to file charges against him. He was suspended from Murdoch's newspaper and no longer works for News Corp.
Yount told Reuters the process was started last Friday with a list of about half a dozen individuals with "the money and the integrity." He did not identify target buyers.
The IAPE Dow Jones workers union has retained the services of the Ownership Associates of Cambridge, Mass., and is working with the Communications Workers of America and the Newspaper Guild to explore alternative bids.
Shares of Dow Jones rose on news of Burkle's move Tuesday.
The union's actions come a day after Rupert Murdoch and his son James met key members of the Bancroft family, which in total holds 64% of the voting power in Dow Jones, for the first time in New York. Murdoch, chairman and chief executive of media conglomerate News Corp. , seeks to take over Dow Jones.
Burkle this spring joined philanthropist Eli Broad to bid for Tribune Co., but the company rejected the two Los Angeles billionaires' offer in favor of a rival bid from Chicago real estate entrepreneur Sam Zell.
'Constructive' Meeting with Murdoch
Murdoch told reporters Monday evening that he and the Bancrofts had a "constructive" meeting, which was designed to reassure the family that his $5 billion offer for the company will not undermine the Wall Street Journal.
"We had a very long and constructive meeting," Murdoch told reporters as he left the meeting at the offices of the Bancroft family advisers.
Crews of reporters drenched from the rain flanked both entrances to the CBS Corp.'s imposing "Black Rock" building, catching only a moment with the 76-year-old year old media mogul as he left.
One focus of the five hours of discussions was safeguards to preserve editorial independence at the Journal, which is a key concern for the Bancrofts, as well as editors and reporters at Dow Jones.
The Murdoch meeting with the Bancroft clan included Christopher Bancroft, Leslie Hill and Elizabeth Steele, who are Dow Jones board members.
According to an earlier report in the Journal, the family was to be accompanied by Dow Jones Chairman Peter McPherson, Bancroft trustee Michael Elefante and attorney Martin Lipton.
The tone of the meeting was expected to resemble more of a social gathering than a session for negotiations or deal-making, as Murdoch hoped to create a rapport with Bancroft family members, the newspaper said.
News Corp. is willing to explore a policy similar to one Reuters Group employs, giving a board of trustees the power to block any deal and prevent any one shareholder from owning more than a 15% stake without the trustees' consent, the Journal reported, citing News Corp. sources.
The Reuters arrangement will continue to be in effect after Canada's Thomson Corp. completes a planned $17.2 billion acquisition of the company. Reuters competes with the Dow Jones Newswires service in providing financial news.
Bancrofts Demand Editorial Independence
Monday's meeting comes after the Bancrofts, a majority of whom initially objected to the deal, said last week they were willing to discuss conditions for selling the Journal while protecting its editorial independence.
In an interview with the Journal Friday, Murdoch said he was willing to accede to demands for tighter controls to ensure editorial independence, up to a point.
"I can't put down $5 billion of my shareholders' money and not be able to run the business," Murdoch told the Journal.
Murdoch, who pitched a proposal to establish an independent editorial board, said the board should comprise people with no business connections to himself or the Bancrofts.
But similar plans at News Corp.-owned newspaper The Times of London have been criticized by journalists, journalism experts and former employees for being ineffective.
Notably, former Times editor Harold Evans was ousted after testing the boundaries of editorial independence at the paper subsequent to Murdoch's purchase in the early 1980s, according to his book "Good Times, Bad Times."
The meeting between Murdoch and the Bancroft family members will be held at the offices of family legal advisor Wachtell, Lipton, Rosen & Katz, according to the Journal report.