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Rupert Murdoch's bid for Wall Street Journal publisher Dow Jones Co. appears to have won enough support from the company's controlling shareholders to ensure its passage, the newspaper reported Tuesday.
The Journal said, quoting unnamed people familiar with the situation, that Bancroft family members representing 32 percent of the company's vote had agreed to the deal. A family spokesman declined to comment.
Murdoch's News Corp. must still decide whether it is comfortable with that level of support in order to proceed. With some public shareholders likely to abstain, News Corp. wants a solid majority of votes committed to the deal.
Dow Jones shares were already sharply higher Tuesday on hopes that a deal was close, and were getting closer and closer to Murdoch's offering price of $60 a share, indicating growing confidence the deal will go through. In early afternoon trading, Dow Jones stock rose $6.21, or 12 percent at $57.77.
The Bancroft family controls 64 percent of the company's shareholder vote. Given that many of the public shareholders representing 29 percent of Dow Jones' vote are likely to support a deal, Murdoch only needs about half of the Bancroft family's block in order to win.
News Corp. has said it would only proceed if it felt there was enough support among the Bancrofts, but it hasn't specified what that level is. A News Corp. spokesman said Monday that the company was "highly unlikely" to proceed with the deal if support from the family remained at the level reported at that time &
about 29 percent.
News Corp.'s board is scheduled to meet Tuesday at 4 p.m. ET, and a decision to seal the deal could come at that time. Dow Jones' board is set to meet later Tuesday, at 7 p.m.
Members of the Bancroft family, which has controlled Dow Jones for a century, had a 5 p.m. deadline Monday to tell the family's lead trustee how they would vote on Murdoch's offer.
Negotiations were apparently continuing over other matters in an attempt to convince holdout Bancroft votes to sign on to the deal, The Wall Street Journal reported. The paper said a proposal under discussion would have News Corp. pay the Bancroft family's advisory fees &
which could total at least $30 million &
if it received the support of at least one of two key holdout shareholders.
Representatives of News Corp., Dow Jones and the Bancroft family all declined to comment on the continuing negotiations on Tuesday.
The Bancrofts are a diverse clan and their voting interest in the company is held through a complex series of privately held trusts, making the outcome difficult to predict.
Over the past few weeks investors have been steadily pushing Dow Jones shares below the $60 price that Murdoch has offered, reflecting increasing doubts about the deal going through.
The Bancroft family has been deeply divided over whether to sell to Murdoch, largely over concerns that his management style could affect the papers' coverage.
Murdoch says any concerns about corporate meddling in the Journal's news coverage are unwarranted. News Corp. has agreed to create a committee that would have to sign off on any decision to hire or fire top editors at the paper.
In a lengthy letter to fellow family members last week, Bancroft descendant Crawford Hill urged them to vote for a sale, saying the family hadn't taken an active enough role in overseeing Dow Jones and was now "paying the price for our passivity over the past 25 years."
Dow Jones' board has tentatively approved the deal, and the final decision now rests with the Bancrofts. Besides several Bancroft family members, including Dow Jones director Christopher Bancroft, Murdoch's bid is also being opposed by former board member Jim Ottaway Jr., whose family controls 7 percent of the shareholder vote.
Murdoch appears to have enough votes to secure Dow Jones & Co. deal
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