June 1 (Bloomberg) -- Dow Jones & Co. shares surged above News Corp.'s $60 offer price on speculation Rupert Murdoch may raise his takeover bid to persuade the Bancroft family to sell.

Shares of the publisher of the Wall Street Journal rose 15 percent after the Bancrofts said last night they will consider a sale, ending a month of resistance to Murdoch's $5 billion offer. Some investors are anticipating Murdoch will increase the bid to complete the deal.

``Murdoch may say that in the interest of good will, we'll give you another $5 to $10 a share to cement the deal,'' said Robert Willis, chief investment officer of Willis Investment Counsel in Gainesville, Georgia, which hasn't sold its 77,000 Dow Jones shares since the bid was announced May 1. ``The Bancrofts have talked among themselves and come to grips with the fact that the premium was just too high to ignore.''

The Bancrofts, whose shares give them 64 percent of the votes, said the decision to consider selling followed a review of Dow Jones's prospects. The reversal underscores the declining fortunes of newspapers and follows the May 15 agreement by competitors Thomson Corp. and Reuters Group Plc to combine in a $17.2 billion deal. Dow Jones said on May 8 advertising sales at the Wall Street Journal dropped 12 percent in April.

``The family has reached consensus that the mission of Dow Jones may be better accomplished in combination or collaboration with another organization which may include News Corp.,'' the Bancrofts said in a statement.

Bloomberg LP, the parent of Bloomberg News, competes with Dow Jones in providing financial news and information.

Higher Offer?

The shares rose $7.89 to $61.20 at 4:02 p.m. in New York Stock Exchange composite trading. They have gained 61 percent this year.

Class A shares of New York-based News Corp., owner of Fox News and 170 newspapers, rose 49 cents to $22.58. They have climbed 5.1 percent this year.

``Yes, it's going to get done, and it's going to be News Corp. and it should be,'' said Leo Hindery, a managing partner at InterMedia LP. ``He was bold. He was thoughtful, and well spoken on the asset.''

The Bancrofts will consider other bidders and options for the company, they said in the statement. The family previously said members holding 52 percent of the voting power opposed the sale of the company.

`Daunting' Price

``They'll be looking for some reassurance on the independence of the newspaper,'' Peter Kreisky, president of Kreisky Media Consultancy in Boston, said in an interview. Bancroft family members have ``realized they can only do a limited amount as an independent company.''

Murdoch's offer places a higher value on Dow Jones than that of Google Inc. The bid represents almost 40 times Dow Jones's projected 2007 earnings, data compiled by Bloomberg show. Google, owner of the world's largest search engine, trades at about 34 times projected 2007 profit.

``It's a daunting price that Murdoch has put out there,'' said Norman Pearlstine, a managing director specializing in media companies at the Carlyle Group and a former executive editor of the Wall Street Journal. ``Whoever would be coming in over that would either have to see synergies that are very hard to imagine or that it would have to be an ego-kind of buy.''

The offer is about 17 times Dow Jones's projected 2007 profit before interest, taxes, depreciation and amortization, or Ebitda, based on estimates by Prudential Equity Group analyst Steven Barlow in New York. That's almost double the valuation McClatchy Co., publisher of the Miami Herald, put on Knight Ridder Inc. last year and that real estate billionaire Sam Zell is offering for Tribune Co., owner of the Los Angeles Times.

No White Knight

A competing bid from a newspaper company such as Washington Post Co. or Gannett Co. is unlikely because News Corp.'s offer is so high, said John Morton, an independent newspaper analyst based in Silver Spring, Maryland. The $60-a-share bid was 65 percent more than Dow Jones's stock price when it was announced.

``Considering the state of newspapers and how high Murdoch's bid is, no white knight springs to mind,'' Morton said. ``It would be a hard sell to the shareholders, simply because what you're buying is an enormous amount of goodwill that currently is not producing an enormous amount of profit.''

Washington Post spokesman John Morse and Gannett spokeswoman Tara Connell didn't immediately return calls seeking comment.

News Corp. spokesman Andrew Butcher said yesterday that the company's executives ``look forward'' to a meeting. He declined further comment.

Joining Talks

A Dow Jones director will attend talks between the Bancrofts and News Corp., New York-based Dow Jones said in a statement. The board will study strategic options for the company now that the Bancrofts have said they are willing to consider Murdoch's offer, Dow Jones said.

Murdoch, 76, is seeking a source of business news for his publications and for the Fox Business Channel he plans to start this year.

Murdoch has sought to assuage concerns over the editorial independence of the Wall Street Journal by offering the Bancrofts a seat on News Corp.'s board and pledging to set up an autonomous panel to oversee the newspaper.

Such a board, in place at News Corp.'s Times of London, would ensure the hiring and firing of the Wall Street Journal's editor and managing editor would be made with the approval of the panel's directors. It would also ensure any dispute between management and editors is arbitrated.

Solo Party

The company may not get a higher offer than Murdoch's, said Michael Chren, managing director of Allegiant Asset Management Co. in Palm Beach Gardens, Florida. The Allegiant Large Cap Value Fund had 436,000 Dow Jones shares at the end of April.

``My sense is that Murdoch has them exactly where he wants them,'' Chren said. ``No one else is coming to this party. It seems very likely we're headed to a deal between News Corp. and Dow Jones.''

Bancroft family members cited concern over the Wall Street Journal's independence as a factor in their deliberations.

``The family has advised the company's board that it intends to meet with News Corp. to determine whether, in the context of the current or any modified News Corp. proposal, it will be possible to ensure the level of commitment to editorial independence, integrity and journalistic freedom that is the hallmark of Dow Jones,'' they said in the statement.

To contact the reporter on this story: Leon Lazaroff in New York at llazaroff@bloomberg.net.

Last Updated: June 1, 2007 16:17 EDT