Murdoch, Bancrofts: 'Very Solid' Progress
News Corp. (NWS) Chief Executive Officer Rupert Murdoch on June 4 made what insiders call "very solid" progress toward buying Dow Jones (DJ), parent of The Wall Street Journal, making a deal now appear very likely, they say.
"Rupert was very happy" with the outcome of a more than four-hour session with members of the Bancroft family, who control the voting stake in Dow Jones. Murdoch's News Corp. offered $60 a share, or $5 billion, to buy the iconic business newspaper in May, and until today the family had resisted meeting with Murdoch (see BusinessWeek.com, 5/14/07, "Crazy Like a Fox").
The family, which controls more than 58% of Dow Jones voting stock, arranged on Friday to sit down with Murdoch to hear what the longtime media maven had in mind for ensuring the continued editorial independence of the paper. That meeting, which was held at the offices of family legal adviser Wachtell, Lipton, Rosen & Katz, was initially designed as mostly a social gathering that was expected to last two hours. One of the main purposes of the meeting was to get the three Bancroft family members who attended—Christopher Bancroft, Leslie Hill, and Elizabeth Steele—on the "same page as Rupert," says someone with knowledge of the meeting.
Murdoch, they say, listened carefully to the family's concerns. With 34-year-old son James at his side at the table, Murdoch apparently tried to assuage the Bancrofts' concerns with the notion that he, too, understood the need to protect the family's interests.
Murdoch laid out a plan to create an independent advisory board for the newspaper, according to folks with knowledge of the meeting, but stopped short of the kind of powerful board that might block him from making business decisions that he sees as crucial to helping the newspaper. He did not offer to raise the price he was willing to pay, although there was some discussion to that effect.
Not a Done Deal
No deal is certain, of course. The talks could still end up falling apart, and rival bidders could emerge for Dow Jones. The Bancroft family originally said that they were not interested in discussing a sale of Dow Jones to Murdoch. The family reversed itself May 31, opening the door to a discussion. But many family members remain leery of giving up editorial control of the Journal, particularly to someone as strong-willed as Murdoch.
One Bancroft family member declined to comment. A Dow Jones spokeswoman as well as board member Michael Elefante did not respond immediately to messages.
The two sides are expected to meet again, perhaps within a week, one source said. In the meantime, the Bancroft board members are expected to report back to others in their group who weren't in attendance. "We are likely to have a few more meetings," says one source. "But this will get done. We are fairly confident."