Dow Jones & Co. and News Corp. reportedly moved one step closer yesterday to agreeing on editorial protections for Dow Jones, an agreement one news source said would pave the way for the sale of the publisher of The Wall Street Journal to Rupert Murdoch’s media conglomerate for about $5 billion.
While a deal appeared likely, The Wall Street Journal stated that both sides were still concerned whether the Bancroft family, which has controlled Dow Jones since early in the 20th century, would support the compromise.
The Bancroft family initially had doubts about the sale when Murdoch first made his bid in May. Although the family has overcome some of its concerns and ceded negotiations over editorial protections to Dow Jones’ board, it still holds control of most of the super-voting shares in the company giving it ultimate veto power, the news source stated.
One of the remaining issues on the table is whether News Corp. would increase the value of its $60-a-share offer even though no third-party bids for Dow Jones have emerged to put price pressure on News Corp.
Story Continues Below
But the Journal reported that both sides indicated they didn’t see any last-minute jockeying on price as a major impediment to completing a deal.
Yesterday, the two sides reportedly agreed on the outlines of a board to oversee issues of editorial independence. News Corp. had suggested a 16-member board — including five independent members and 11 appointed by News Corp. — to oversee editorial independence and other issues.
Murdoch reportedly requested that none of the members have any connection to either News Corp. or to the Bancrofts or Dow Jones.
The Journal stated that Dow Jones was willing to accept that arrangement but wanted the members to choose their successors.
Another issue that still needed to be resolved was funding for the special Dow Jones board committee. According to the Journal, the Dow Jones proposal indicated that an outside foundation and certain family trusts would provide funding for any eventual legal challenges on behalf of the special committee. News Corp. reportedly countered in its proposal that the special committee would have adequate funding for "travel and accommodations” but didn’t address how the committee would be funded.
The two sides reportedly appeared near an agreement on the issue yesterday.
News Corp. owns more than 100 newspapers, plus other assets including a movie studio, broadcast and cable television networks under the Fox name, the book publisher HarperCollins, the Internet site MySpace and satellite television interests around the world.
Dow Jones publishes The Wall Street Journal and its international and online editions, Barron’s, the Far Eastern Economic Review, MarketWatch, Dow Jones Indexes and the Ottaway group of community newspapers. It also co-owns SmartMoney with Hearst Corp and provides news content to CNBC television operations worldwide and to radio stations in the U.S.
Editor's note:
12 Ways to Recession Proof Your Portfolio
What Happens When Easy Money Disappears? 12 Ways to Profit.
Learn the Money-Making Secrets of the World`s Four Most Successful Investors
Buffett: The best book ever written on investing.
