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NEW YORK -- News Corp. reached a tentative agreement for the purchase of Dow Jones & Co. at its original $5 billion offer price.
The deal will be put to the full Dow Jones board tomorrow evening for its approval, said people familiar with the situation.
In what could be the final round of talks, this afternoon negotiators from News Corp. and Dow Jones -including Chief Executive Richard Zannino, company advisers and two independent directors - reached an agreement in principle on a deal first proposed by News Corp. in mid-April. News Corp. Chairman Rupert Murdoch resisted pressure from Dow Jones to raise his initial $60 a share offer, which represented a 67 percent premium to where the Dow Jones stock was trading before news of the offer became public.
Dow Jones shares were down 54 cents to $56.95 in 4 p.m. New York Stock Exchange composite trading yesterday.
The deal still faces its biggest hurdle - getting approval from the Bancroft family, which controls 64 percent of Dow Jones's voting stock. Mr. Zannino has indicated to News Corp. that the family's position on the deal is too close to call, according to a person who spoke to him.
Michael B. Elefante, the Bancroft family's lead trustee, has scheduled a meeting for Thursday at which he would present the agreement to all Bancroft family members before asking for their final vote. Mr. Elefante is expected to give the family several days to make a decision, suggesting a final resolution could be achieved some time next week.
However, the Bancroft family remains sharply divided on a sale to News Corp. While some members are open to a deal, others have been looking hard for an alternative.
Christopher Bancroft, 55 years old, a Dow Jones director who serves as a trustee overseeing shares that account for about 15 percent of the company's total shareholder votes, has spent the past several weeks approaching hedge funds, private-equity firms and others in an attempt to buy enough shares of Dow Jones to block a sale. Another family director, Leslie Hill, has pressed the company to meet with investors, such as supermarket mogul Ron Burkle, who have alternative proposals for Dow Jones. Ms. Hill's mother, Jane Cox MacElree, serves as a trustee for or owns shares that account for about 15 percent of the company's total shareholder vote.
News Corp's unwillingness to raise the price could also harden opposition from within the family. Some Dow Jones top executives and independent directors had hoped the Bancroft family's ambivalence about the Murdoch deal would help the company extract a few more dollars per share, according to people close to Dow Jones.
The negotiations began with a lunch meeting attended by both Mr. Murdoch and Mr. Zannino.
In addition to Dow Jones Newswires and other newswires, Dow Jones publishes The Wall Street Journal and its international and online editions, Barron's, the Far Eastern Economic Review, MarketWatch, Dow Jones Indexes and the Ottaway group of community newspapers. Dow Jones owns Factiva and co-owns SmartMoney with Hearst Corp. It also provides news content to CNBC television operations worldwide and to radio stations in the U.S.
http://www.chicagotribune.com/business/chi-070716dowjones,1,4518501.story?coll=chi-news-hed
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