Murdoch's $5B bid for Dow Jones succeeds
NEW YORK -- News Corp. nws CEO Rupert Murdoch became the king of business news late Tuesday, as Dow Jones dj accepted his $5 billion offer.
With Dow Jones, Murdoch will have control of a mighty arsenal of business news properties, including The Wall Street Journal, WSJ.com, Barron's, MarketWatch.com and SmartMoney.
Closing of the deal will end 105 years of Bancroft-family ownership of the company, which was founded in 1882 to provide customers with news about stock and bond trades.
Leslie Hill, a member of the Bancroft family, resigned from the board of Dow Jones after an unsuccessful effort to prevent the sale.
Hill's letter of resignation, dated July 31, was submitted on Wednesday in a filing with the Securities and Exchange Commission.
"Regrettably, my inability to any longer protect what this brand has stood for means I herewith resign from the Board of Dow Jones," Hill said in her letter.
"It's a bad thing for Dow Jones and American journalism that the Bancroft family could not resist Rupert Murdoch's generous offer," said a statement from Jim Ottaway, leader of the family that controls 7% of the votes. The Ottoways sold their community newspaper company to Dow Jones in 1970.
"I hope Rupert Murdoch, and whoever follows him at News Corp., will keep his promises to protect and invest in the unique quality and integrity of The Wall Street Journal, Barron's and all the Dow Jones electronic news services," Ottoway said.
Some members of the Bancroft family feared that the owner of the New York Post and Fox News Channel will use Dow Jones properties to advance his business and political interests. To address that concern, Murdoch agreed to create a five-member board, jointly selected by him and the Bancrofts, that could veto his choices for the top editorial jobs at The Journal and at Dow Jones Newswires.
Murdoch has said he intends to expand the company's presence online and overseas, where it competes with Pearson's Financial Times.
Dow Jones properties also likely will be marshaled to support News Corp.'s Fox Business Network, a cable channel to launch on Oct. 15 and challenge CNBC.
Murdoch's victory came after a week in which family members — who collectively own shares with 64% of Dow Jones' votes — engaged in an often bitter and emotional debate about their legacy.
The turning point in the process came Tuesday, when members of the family's Denver-based trust, with 9.1% of the voting stock, abandoned an effort to get a premium price for Bancroft-owned shares.
At that point, Bancroft trusts with at least 38% of the company's votes had lined up behind Murdoch's $60-a-share offer. At that price — a 67% premium on Dow Jones' market value before word of his offer leaked on May 1 — Murdoch already could count on massive support from public shareholders with at least 24% of the shares.
Dow Jones closed up 11.3% in Tuesday trading, to $57.38, as word of Murdoch's approaching victory spread.
Still, the Independent Association of Publishers' Employees — which represents about 2,000 Dow Jones employees — said that it was "disappointed" with the sale to Murdoch.