Rupert Murdoch is not planning to raise his bid for Dow Jones beyond his original $5 billion offer, he told Reuters Wednesday. Murdoch and the Dow Jones board have reached agreement on the vexed question of editorial safeguards for the Wall Street Journal, but the Bancroft family, which holds a controlling stake in the company, has yet to approve the terms. Murdoch had been expected by some analysts to sweeten his offer to clinch the deal, but he has apparently ruled that out. "Everything is done," Murdoch said. "We are just waiting for a final approval of the Bancroft family...The final approval is in the next two, three weeks' time or not at all." Murdoch's offer represents a 65% premium to the level at which the shares were previously trading. Though the Dow Jones board took over buyout negotiations from the Bancrofts last week, the family and other shareholders still have final say over any proposed transaction, meaning Murdoch's success is by no means assured. Leslie Hill, a Bancroft and a board member, recently turned against the Murdoch offer. A law firm that oversees trusts with 8.9% of Dow Jones voting power will vote in favor, but the Ottaway family, which holds approximately 5%, will vote against. Update: The New York Times reports that the "agreement in principle" reached by the Dow Jones board and Murdoch will give News Corp. exclusive power to hire and fire top editors at the Wall Street Journal. That concession diametrically opposes the position of some members of the Bancroft family as well as other shareholders who have said their first priority is to protect the Journal from Murdoch's influence.
Sources: TheStreet.com, MarketWatch, Reuters
Commentary: Dow Jones Board and Murdoch Agree on Editorial Safeguards • Murdoch and Dow Jones Near Deal -- WSJ • Dow Jones-Murdoch Talks Intensify
Stocks/ETFs to watch: Dow Jones & Company Inc. (DJ), News Corp. (NASDAQ:NWS). Competitors: Reuters Group PLC [ADR] (RTRSY). ETFs: PowerShares Dynamic Media Portfolio ETF (NYSEARCA:PBS)
Conference call transcripts: Dow Jones Q1 2007, News Corporation F3Q07
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