- The Washington Times - Friday, June 1, 2007

Shares of Dow Jones & Co. Inc. shot up nearly 15 percent yesterday after the Wall Street Journal publisher’s controlling shareholders agreed Thursday night to consider a $5 billion bid by News Corp.

The stock closed up $7.89 at $61.20 on the New York Stock Exchange, above Rupert Murdoch’s $60-a-share takeover price, on news that the Bancroft family, which owns 64 percent of Dow Jones’ voting stock, will meet with the Australian media mogul after initially rejecting his offer.

“They had to meet with Murdoch or else there’d be a [shareholder] lawsuit,” said Edward Atorino, a media analyst for the Benchmark Co. “I think reality began to set in here.”

Dow Jones also owns a newswire, the financial weekly Barron’s and the Dow Jones Industrial Average.

In a statement Thursday, the company said the Bancroft family “has reached consensus that the mission of Dow Jones may be better accomplished in combination or collaboration with another organization,” which may include Mr. Murdoch’s News Corp., owner of Fox News Channel and the New York Post.

Bancroft family members in favor of the deal surely have been working behind the scenes to lobby those who were opposed to the offer, which Mr. Murdoch made in a letter in April, Mr. Atorino said.

Since Mr. Murdoch’s unsolicited overture, two Dow Jones competitors, Thomson and Reuters, agreed to combine in a $17 billion deal. “This presented a new challenge to the old Dow Jones,” noted Mr. Atorino, who doesn’t own any shares of Dow Jones or News Corp.

News Corp. is expected to raise the offer, analysts say. While other bidders could come forward, it’s not clear that anyone would have as much incentive to buy the company; Mr. Murdoch last month told Fox News host Neil Cavuto he sees a potential partnership between the Journal and Fox’s new business channel, scheduled to debut this fall.

Mr. Atorino said the chances of another bidder coming forward are “slim. I don’t think you want to get into a bidding war with Murdoch.”

At this point, completing a deal is “just a matter of price,” he said.

But John Morton, a newspaper analyst in Silver Spring, disagreed.

“So many people are taking this as a forgone conclusion and it might not be. It’s important to remember that what’s going to happen to Dow Jones is going to be what the Bancroft family wants to have happen to it,” he said.

Editorial independence has emerged as a potential sticking point in the family’s deliberations. Critics of Mr. Murdoch’s Fox News Channel accuse him of bias and sensationalism.

James Ottaway Jr., whose family controls 6.2 percent of the voting rights at Dow Jones & Co., said he was disappointed with the Bancroft family decision.

“I’d certainly prefer they not even talk to him,” Mr. Ottaway said. “It’s a step toward a deal, but meeting with him doesn’t necessarily lead to negotiations or an agreement.”

On Thursday, the Bancroft family said its purpose of meeting with Mr. Murdoch will be “to determine whether, in the context of any 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.”

A union representing workers for Dow Jones, the Independent Association of Publishers’ Employees, said it is still against the proposed takeover.

“While we understand that the Bancroft family may have an obligation to hear out potential opportunities, we urge them to stand firm and maintain their principled stand to maintain the integrity of the Wall Street Journal and all Dow Jones publications. We don’t believe the promises Mr. Murdoch has made can be trusted,” said Steve Yount, the group’s president.

“I’m sure Murdoch will swear on Bibles that he won’t screw up the Journal. And why should he? It’s a great paper,” Mr. Atorino said. If the Dow Jones board rejects the offer, “the stock goes back down to $30 and they’ve got a new competitor.”

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