Dow Jones to Consider News Corp. Offer

Rupert Murdoch's News Corp. has reached a tentative agreement to purchase Dow Jones & Co. for its offer price of $5 billion. The board of Dow Jones will vote on the $60-a-share offer this evening.

The proposal stands where it was first made by the News Corp. in mid-April. Chairman Rupert Murdoch managed to resist pressure from Dow Jones to hoist from his initial offers, which represented a 67% premium to where the Dow Jones stock was trading before the word spread out.

Shares of Dow Jones declined 54 cents to $56.95 in New York Stock Exchange composite trading yesterday. They may rise following the reports of takeover.

However, as the boards of the two companies move ahead with the deal, there remains a hurdle -- News Corporation still has to get an approval from the Bancroft family, who own 64 per cent of Dow Jones’ voting rights. The family has not allowed the company to join Murdoch’s group.

According to the Wall Street Journal reports the family is expected to be given several days to consider the takeover offer and the decision may be made by next week. The family's lead trustee, Michael Elefante, is planning to present the agreement to all family members at a meeting scheduled for July 19.

However, the Bancroft family is said to remain divided on a sale to News Corp. While some members are open to a deal, others seem to be searching for an alternative.

Christopher Bancroft, a director at Dow Jones and trustee of 15 per cent of the voting rights has spent the past several weeks approaching hedge funds, private-equity firms and others in order to buy enough shares of Dow Jones to block a sale. Another family director, Leslie Hill, has pressed other family members to meet investors.

The agreement on the offer was reached by negotiators that included Dow Jones Chief Executive Officer Richard Zannino, company advisers and two independent board members, the Journal said.