Rupert Murdoch's News Corp. appeared to be inching closer to a deal to buy Dow Jones and gaining enough support from the divided Bancroft family, but both sides were still wrangling over the price.
In an attempt to win support among family members for the $5 billion deal, Dow Jones was negotiating for News Corp. to cover the advisory fees for the Bancrofts of at least $30 million, The Wall Street Journal reported on its Web site.
The Bancroft family controls Dow Jones through its 64% stake in voting stock of the company.
The deal would go through if two holdout shareholders agreed, the Journal reported. They are board member Christopher Bancroft and trusts managed by Denver law firm Hole Roberts & Owen. If they agree, it would give News Corp. enough Bancroft support to buy Dow Jones.
Michael Elefante, a Dow Jones board member and adviser to the Bancrofts, had set Monday as a deadline for the Bancrofts to indicate how they would vote. Elefante then is expected to present the results to Dow Jones's and News Corp.'s boards for them to determine whether they can complete the deal.
Separately, Internet entrepreneur Brad Greenspan urged Dow Jones to meet with him and provide material to conduct due diligence as part of his own proposal for the company.
Greenspan said in a letter on Monday evening that he had lined up five investors to contribute $600 million to fund three Wall Street Journal online video and cable television spinoffs in Asia, Europe and the United States.
These investor groups were interested in buying a stake and investing in Dow Jones, he said.
A source familiar with the matter told Reuters they include Intel's Intel Capital, Apex Partners, Jana Partners, a unit of Softbank and Trafelet.
Former Dow Jones board member Dieter von Holtzbrinck, who resigned in protest of Murdoch's bid, also could be interested, the source said.
Their participation hinges on whether Dow Jones is willing to meet and discuss Greenspan's proposal, the source said.
Greenspan said he was in discussions with Bancroft family board members Christopher Bancroft and Leslie Hill. Bancroft declined to comment. Hill did not respond to telephone calls seeking comment.
The potential investors either declined comment or could not be reached.
Comfortable Margin
Earlier in the day, a spokesman for News Corp. said it was highly unlikely to pursue the bid for Dow Jones if it does not win more support from the Bancrofts.
News Corp. declined to specify what level of support the deal had from the Bancroft family.
Bancrofts holding about 28% of voting shares supported Murdoch's $60-per-share offer as of Monday night, according to the Journal, which is owned by Dow Jones.
That percentage, which appeared unchanged from Sunday night, could be enough for News Corp. to succeed since the majority of outside shareholders, who own 29% of Dow Jones voting shares, are expected to favor the deal.
Still, Murdoch had sought a more comfortable margin, the Journal reported.
The New York Times said more than 30% indicated to their lawyers that they would support the bid, but not all committed in writing.
News Corp.'s board is expected to meet at 4 pm New York time Tuesday to decide on whether to pursue the bid, the Journal reported.
Murdoch would probably want a support level of 28% to 30% voting shares from the Bancrofts to be comfortable, said a source familiar with the matter.
A News Corp. official was not immediately available for comment. A Bancroft family spokesman declined to comment.
Dow Jones shares fell as much 8.5% on Monday on investor fears that the deal will fall through. Shares closed down 5.3% at $51.56 on the New York Stock Exchange. Dow Jones shares have slipped from a high of nearly $62 in June.