Dow Jones Board Takes Over News Corp. Talks
The board of Dow Jones is assuming control of negotiations with Rupert Murdoch's News Corp. over the media conglomerate's unsolicited $5 billion offer to buy the company, which publishes The Wall Street Journal.
Dow Jones said in a statement late Wednesday that its board would "take the lead in addressing all aspects" of negotiations with News Corp. . The Bancroft family had been hashing out proposals to give to News Corp. to ensure the editorial independence of the Journal, but none had yet been delivered.
The family, which controls 64 percent of Dow Jones' shareholder vote through a special class of stock, had said it was primarily concerned with safeguarding the integrity of the Journal, which the family has controlled for more than a century.
But divisions within the far-flung family, which has about three dozen adult members spread around the country, have become clear since the early stages of Murdoch's offer, which became public in early May.
At first the family rebuffed Murdoch's offer, then agreed to meet with him in early June to discuss editorial safeguards for the paper. Both sides described the initial meeting as constructive, but no subsequent meeting was arranged.
The family had been expected to deliver its proposals for the Journal to News Corp. last week, but on Wednesday a family spokesman said that the four family representatives who serve as Dow Jones directors had submitted a plan instead to Dow Jones' board, which would consider it before presenting anything to News Corp. The proposal included measures such as an editorial board to oversee the Journal and protections for key top editors at the paper.
Until the board asserted its control Wednesday over the dealings with News Corp., the assumption had been that the Bancrofts - who could squash any deal to change control of the company - would first make sure that their concerns over editorial independence had been addressed.
A union that represents Dow Jones employees and a former board member and minority shareholder, Jim Ottaway Jr., say they are concerned that the Journal's coverage might weaken under Murdoch and favor News Corp.'s corporate interests.
News Corp. has said those concerns are not warranted.
The Bancroft family owns about a one-quarter economic interest in Dow Jones but controls the shareholder vote through a special class of supervoting shares that aren't traded publicly.
Other newspaper publishers also have two-class share systems that allow families to retain control, but in most other cases that control is concentrated in a smaller number of family members, such as the Grahams of The Washington Post Co., the Sulzbergers of The New York Times Co., or the McClatchys of Sacramento, Calif.-based McClatchy Co.
Murdoch's high offer price - a premium of about 65 percent over the stock's closing price before his offer became public - has yet to be matched by other serious bidders.
Financial Times publisher Pearson PLC has been reported to be in early talks with General Electric Co., which owns financial news channel CNBC, about putting together a possible alternative to Murdoch's bid. News Corp., which owns Fox News Channel and other cable networks, is planning to launch a business news cable channel to compete with CNBC.
Supermarket billionaire Ron Burkle is working with a Dow Jones union to explore other alternatives.
On Wednesday, Brad Greenspan, the former chief executive of the parent company of MySpace, said he would offer to buy about 25 percent of Dow Jones stock at $60 a share, the same price Murdoch has offered, saying it was an "attractive alternative to the current options."
Greenspan has sued MySpace - News Corp. bought MySpace from Greenspan in 2005 for $580 million - saying the company violated antitrust laws by blocking links to his new online video-sharing venture.