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Rupert Murdoch reached a tentative agreement to buy Wall Street Journal publisher Dow Jones Co. for his original price of $5 billion, the Journal reported Tuesday, but he must still win over the Bancroft family, which controls the company through a special class of shares.
The Bancrofts have been deeply divided over the sale due to concerns over whether the Journal would remain editorially independent under Murdoch. Several key family members have sought alternatives to an acquisition by the media baron, but so far no serious contenders have emerged.
Dow Jones and a Bancroft family spokesman declined to comment, and a spokesman for News Corp., Murdoch's media conglomerate, didn't return calls seeking comment early Tuesday.
Besides the Journal, Dow Jones owns Ottaway Media Group's community newspapers, which includes the Ashland Daily Tidings and the Mail Tribune.
Dow Jones also owns Dow Jones Newswires, the Factiva news database, Barron's and several well-known stock market indicators including the Dow Jones industrial average.
The Journal reported that the tentative agreement would go to Dow Jones' board late Tuesday. The deal would then be presented to Bancroft family members on Thursday by Michael Elefante, the Bancroft family's lead trustee and a director of Dow Jones.
The family would have several days to make a decision.
Christopher Bancroft, another Dow Jones director, has reached out to major stockholders to buy enough shares of Dow Jones to block a sale, and another Dow Jones director and Bancroft family representative, Leslie Hill, has been trying to find other buyers, the Journal reported.
Murdoch resisted pressure from Dow Jones to raise his initial $60 a share offer, which represented a huge premium of about 65 percent over the mid-$30s level that Dow Jones stock was trading at before the proposal became public in early May. Shares closed at $56.95 Monday.
Murdoch has long wanted to own the Journal, along with its clout on Wall Street and a history of outstanding journalism. Murdoch has said he would invest in the Journal's online and overseas operations, and help build a business-themed cable news channel that would rival General Electric Co.'s highly profitable CNBC network.
A union representing Journal reporters and other Dow Jones employees has objected to Murdoch's bid, saying he would downgrade news coverage and interfere with newsroom independence for his own business interests.
The Bancrofts originally rebuffed Murdoch's approach but then agreed to meet with him in early June. The two sides agreed to form a committee that would approve the hiring or firing of top editors at the Journal to ensure independence.
Dow Jones directors have been searching for rivals to Murdoch's $5 billion bid, but it seemed unlikely that anyone can top it.
A committee of Dow Jones directors, including a representative of the Bancroft family, met last week with supermarket billionaire Ron Burkle and Web entrepreneur Brad Greenspan, but no counteroffer has emerged. Earlier, General Electric and Pearson PLC abandoned exploratory talks to combine GE's CNBC channel with Dow Jones and Pearson's Financial Times newspaper.
News Corp. owns the Fox broadcast network, Fox News Channel, newspapers in the United Kingdom, Murdoch's native Australia and the New York Post, the Twentieth Century Fox movie and TV studio and MySpace, the online social networking site.
The Bancroft clan trace their ownership of Dow Jones to Clarence Barron, a Dow Jones correspondent who bought control of the company in 1902. Over the years, their ties to Dow Jones have become more remote. No family member is involved in day-to-day operations, but the Bancrofts control the company through a special class of shares.
The Bancrofts own one-quarter Dow Jones but control 64 percent of the company's shareholder vote through a special class of shares that have 10 votes each versus one vote for every publicly held share.
Dow Jones, News Corp. reach tentative deal
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