Seeking Alpha

News Corp. and Dow Jones Reach Tentative Deal -- WSJ

by: SA Editor Judith Levy July 17, 2007 | about: DJ / NWS    
About this author:
Submit
an article to

The Wall Street Journal reports that Rupert Murdoch has reached an agreement in principle to buy Dow Jones at his original bid of $5 billion, a 67% premium to the shares' level before the offer was announced in April. The agreement will go to the Dow Jones board Tuesday for approval. The two sides conducted a round of negotiations Monday at which Murdoch declined to sweeten his offer. Michael B. Elefante, lead trustee of the controlling Bancroft family, will present the deal to them on Thursday. The Bancrofts, who hold 64% of the company's voting shares but are not obliged to vote together, will be given a few days to deliberate. Dow Jones CEO Richard F. Zannino considers the decision of the family, which is sharply divided on the matter, too close to call. Dow Jones director Christopher Bancroft, who controls about 15% of the company's shareholder votes, has been approaching hedge funds and other investors in a bid to DJ 17 07 2007 Chart NWS 17 07 2007 Chartaccumulate enough super-voting shares to stop the sale. Director Leslie Hill, another family member whose mother controls about 15% of the votes, also opposes the sale and has urged the company to pursue alternative bidders. In related news, Dow Jones announced Tuesday it has increased the universe of company profiles for the Russian and German markets in its Factiva databases to a respective 110,000 and 200,000.

Sources: Wall Street Journal, Financial Times, Chron.com, Dow Jones press release on Factiva
Commentary: Christopher Bancroft Lobbying to Nix Murdoch Deal • Dow Jones' Bancrofts: Time to Get Off The Pot • Murdoch: Dow Jones Bid Stays at $60 per Share
Stocks/ETFs to watch: Dow Jones & Company Inc. (DJ), News Corp. (NWS). Competitors: Reuters Group PLC [ADR] (RTRSY). ETFs: PowerShares Dynamic Media Portfolio ETF (PBS)
Earnings call transcripts: Dow Jones Q1 2007, News Corporation F3Q07

Seeking Alpha's news briefs are combined into a pre-market summary called Wall Street Breakfast. Get Wall Street Breakfast by email -- it's free and takes only seconds to sign up.