Dow Jones Approves Murdoch Takeover Deal
Dow Jones approves Murdoch takeover deal
http://rawstory.com/news/afp/Dow_Jon..._07182007.html
Published: Wednesday July 18, 2007
The board of US media firm Dow Jones & Co voted to approve a five-billion-dollar takeover bid by Rupert Murdoch's News Corp., the target company announced late Tuesday.
The firm confirmed a report in its daily business title The Wall Street Journal that it "would be prepared to approve, and recommend to the Dow Jones stockholders" the agreement, in a statement on its website.
The fate of the deal now rests with controlling shareholders in the Bancroft family, which holds 64 percent of the voting stocks in Dow Jones.
Amid reports of divisions within the family, the proposal is expected to be presented to the Bancrofts at a meeting on Thursday, though it could take more days before they make a decision on the deal, the newspaper said.
If it goes ahead, the deal could reshape the US media industry landscape and expand Murdoch's global media empire.
News Corp. said in a statement it was "grateful to the Board of Dow Jones & Company for its strong vote of support in favor of our offer to acquire Dow Jones."
The company said it was confident Dow Jones "will become an even more formidable and respected company" in combination with News Corp.'s "global content and distribution platforms."
Two Dow Jones board directors abstained from the vote, which has divided key shareholders over concerns for the prestigious title's editorial independence.
One member left the meeting early, Chris Bancroft, who opposes the sale to Murdoch and has sought out other investors to try to block Murdoch's move.
The newspaper said Murdoch and Dow Jones chief executive Richard Zannino had reached a tentative agreement at a lunch Monday.
Zannino has described the family's stance on the proposal as too close to call, the newspaper said.
The Bancroft family has been divided over the takeover prospect, with some members seeking steps to block it.
The Bancrofts initially rebuffed Murdoch's takeover, citing concerns about editorial independence, but negotiations have persisted between the parties as Murdoch has sought to allay the family's worries.
Steven Yount, the president of the IAPE union which represents many Dow Jones employees, earlier told AFP: "There are a lot of rumors, but... there won't be any deal until the Bancroft family signs an agreement, and as far as I know they are still looking for alternatives."
Murdoch resisted pressure from Dow Jones to raise his initial 60 dollars-per-share offer, and the five-billion-dollar (3.6-billion-euro) offer reflects his original bid.
The offer represents a hefty premium to the price of Dow Jones shares at the time of the offer.
Some members of the Bancroft family have been looking for alternatives to Murdoch's News Corp. and have actively courted other potential investors.
A number of Wall Street Journal journalists and the IAPE union have also voiced strong opposition to Murdoch gaining control of Dow Jones and its prestigious business daily.
Some Journal reporters have publicly expressed concerns that Murdoch would erode the publication's editorial independence to boost the commercial interests of his global media empire.
Dow Jones board members have met billionaire Ron Burkle and Internet entrepreneur Brad Greenspan to hear alternative proposals to buy the company as a last-ditch alternative to Murdoch's hostile bid.
Murdoch is hoping to acquire Dow Jones ahead of News Corp.'s planned October launch of a new business news cable television channel in the United States intended to challenge CNBC.
Consulting firm Challenger, Gray and Christmas said News Corp. would likely initiate job cuts if it succeeds in acquiring Dow Jones.
"Cuts can be expected in the News Corp.-Dow Jones merger, as News Corp. seeks to offset its five-billion-dollar purchase," the consultancy said.
It also warned of "culture clashes," noting it can sometimes prove difficult to combine seperate corporate cultures.
