Rupert Murdoch close to a deal with the Bancroft family

Citing unnamed sources, many publications speculate that Rupert Murdoch has secured enough votes from the Bancroft family to finalize the Dow Jones purchase.

Rupert Murdoch close to a deal with the Bancroft family Nothing has been made public yet, but many financial publications speculate that Rupert Murdoch has secured enough votes from the Bancroft family to close the deal for the purchase of Dow Jones & Co Inc.

The deal was part of the financial betting props offered by the online betting website Bodog Sports (new window) on May 10th, which had Murdoch at -160 not to buy the company. If the deal is closed, the website will payout $100 for every $160 bet.

Update: After this story was published, John Prestbo, editor and executive director of Dow Jones Indexes, told reporters, citing an internal memo: "The Bancroft family has accepted, Dow Jones will be part of News Corp."

But nothing is 100% certain at this moment. Both Rupert Murdoch's News Corp. and Dow Jones declined to comment on the negotiations, but rumors have driven the share of Dow Jones to almost $58, close to the $60-per-share offered by the media mogul. After Dow Jones' board approved the deal, the final decision now rests with the Bancrofts.

The uncertainty of the negotiations come from the Bancroft family, with some members unwilling to sell the company, and especially the jewel "Wall Street Journal" to Murdoch, questioning his management style. Rupert Murdoch owns the Fox spin-offs via his News Corp. and members of the Bancroft family, as well as other shareholders, have expressed their concern of the future of the WSJ once it comes in the hands of, what some call "tabloid news" network, News Corp.

News networks unrelated to either of the companies are reporting that Murdoch has secured 32% of the shares held by the Bancroft family via trusts and Class B Shares, which give 10 times the voting power. The Wall Street Journal also announced that a Denver law firm overseeing a trust holding 9.1% in shares, has reversed its opinion on the deal and will vote for the buy-out, but it was unclear if the trust would vote with all the shares. Total of 35 Bancroft family members hold about 64% of the shares in Dow Jones & Co Inc and another report in the WSJ says that Murdoch has sweetened the deal by offering to cover Bancrofts' advisory fees, which some estimates place around the $30 million mark, helping tilt some family members toward supporting the sale.

Another sign that the closing of the sale may be near are the negative reports of the rival CNBC about the sale of the Wall Street Journal. Later this year News Corp. will launch "Fox Business Network", which would rival CNBC, and many speculate that News Corp. will use the WSJ finance journalists to power the channel.

So far the following shareholders have made their opinion on the sale public:

Crawford Hill (Bancroft descendant) - for the deal

Denver law firm overseeing 9.1% - for the deal

Elizabeth Steele (Bancroft descendant) - for the deal

Christopher Bancroft (Bancroft descendant, Dow Jones director) - against the deal

Jim Ottaway Jr. (former board member, controls 7%) - against the deal

Published on 07/31/2007