New York: The family that controls Dow Jones & Co. said for the first time it would consider selling the publisher of the Wall Street Journal to Rupert Murdoch’s News Corp., dropping its outright opposition to his $5 billion bid.
The Bancroft family, which controls 64% of Dow Jones’s voting power, said it would also look at offers from other bidders. Dow Jones in a separate statement said the board would consider News Corp.’s offer and other approaches.
The Bancroft decision is a change from its earlier rejection of Murdoch’s $60-a-share bid, and brings the publisher of The Wall Street Journal closer to being sold after more than a century of being independent.
“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 Corporation,” the Bancrofts said.
The family said it would meet with Murdoch and News Corp. representatives to see if they can find a way to protect the editorial independence of Dow Jones after a sale.
A date for the meeting has not yet been set, but the expectation is that an initial meeting would take place in a timely manner, said a source close to the Bancrofts.
“We are grateful that the Bankcroft family has ageed to our suggestion to meet,” said News Corp. spokesman Andrew Butcher. “We look forward to sitting down with members of the family in the near future.”
Most of the Bancrofts have opposed the bid over worries that News Corp. chairman and chief executive Rupert Murdoch would tarnish the Journal’s reputation and interfere with the way its reporters cover the news.
Still, the family may be hard-pressed to find another bidder that could top News Corp.’s bid, said Benchmark Co. analyst Ed Atorino. “I think they’re facing the reality of the situation -- that this is a one-time-only event.”
Dow Jones is a more-than-century-old publisher of financial news, and is known especially at the Journal for its meticulous attempts to present news objectively.
Despite its expansion into digital publishing, Dow Jones is suffering from a slowdown in advertising sales and other problems that are affecting U.S. newspaper publishers as advertisers and readers shift their attention to the Internet.
It publishes inve0stors newspaper Barron’s, news Web site Marketwatch.com, and Dow Jones Newswires, which competes with Reuters Group Plc in publishing financial news.
Murdoch, an Australian-born press baron who publishes the New York Post and British newspaper the Times, built his media empire with a heavy reliance on celebrity scandal news and often flamboyant, eye-catching headlines and stories.
At least one Bancroft family member and a major shareholder have said they think Murdoch controlling Dow Jones would erode the company’s reputation for reliable business news.
The Independent Association of Publishers’ Employees, which represents Dow Jones employees, still opposes the bid, said Steve Yount, the group’s president.
“There’s nothing that’s happened in the past month that has made us change our opposition to the News Corp. approach to Dow Jones,” he said. “We think it’s bad for the independence and integrity of the paper. ... It’s also bad, we believe, for the employees of Dow Jones.”
But News Corp.’s offer of a 65% premium to the company’s share price before Dow Jones made the bid public is a persuasive price for the company’s outside shareholders.
A spokesman for T Rowe Price, which holds about 15% of Dow Jones based on Reuters data, said on 30 May, the Bancrofts should consider Murdoch’s offer. Earlier that day, the company’s chief investment officer told the Financial Times that $60 is a fairly attractive price.
The family also said it is willing to consider other bidders and options for the company. Veteran US newspaper analyst John Morton said he doubts that meeting Murdoch will change the Bancrofts’ minds.
“I don’t think this is a capitulation. This is a family and I suspect that most of the majority of the family that opposes the Murdoch bid has some obligation to resolve their concerns,” Morton said. “I can’t envision a scenario in which the family essentially gives up control. They might bring in a partner but not a controlling partner.”
Dow Jones shares rose to $58.50 in after-hours electronic trading. They had closed up 46 cents at $53.31 on the New York Stock Exchange earlier in the day.