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News Corp. in tentative deal to buy Dow Jones

Approval needed on Murdoch's bid

Rupert Murdoch's News Corp. has reportedly reached a tentative agreement to buy Wall Street Journal publisher Dow Jones & Co.

The deal, reported by The Wall Street Journal on its website late last night, is for the original $5 billion price that Murdoch had offered. It will be put to the full Dow Jones board today for its approval, the Journal said, citing unnamed people familiar with the situation.

The deal would still need approval from the Bancroft family, controlling shareholders of Dow Jones, who have been divided on a sale to News Corp. because of concerns over whether the Journal would maintain editorial independence.

Michael B. Elefante, the Bancroft family's lead trustee, has scheduled a meeting for Thursday to present the agreement to the family and is expected to give members several days to make a decision, the Journal said.

Representatives of Dow Jones and News Corp. did not immediately return telephone messages seeking comment.

Negotiators from the two companies reached the agreement in principle yesterday, the Journal reported.

Murdoch had resisted pressure from Dow Jones to raise his $60- per-share offer, which represented a 67 percent premium over the Dow Jones stock trading price before news of the offer became public.

The Bancrofts initially rejected Murdoch's offer but reversed themselves and agreed to meet with him last month to discuss their concerns about keeping the Journal's coverage free from corporate interference.

The Bancroft family, with roots in Boston and Cohasset, has mostly maintained a hands-off style on managing the organization's publications. It owns less than 25 percent of the outstanding stock, but most of those shares have supervoting powers, which effectively gives them a controlling voice. A family spokesman has said the Bancrofts will act as one.

But it is clear that members of the family have disagreed over the prospects of a sale. Some have been open to a deal. Others have recently tried to approach hedge funds, private-equity firms, and others in a push to buy enough company shares to block a sale. Still others have encouraged negotiations with investors, such as supermarket billionaire Ron Burkle and Web entrepreneur Bud Greenspan, who were rumored to be putting together an offer.

Murdoch has long wanted to own the Journal, which has won many prizes for editorial excellence. He has denied making plans for major cuts, instead saying he would invest in its online and overseas operations and tap the company's resources to help build a business cable news channel that would rival General Electric Co.'s highly profitable CNBC network. The channel, to be called the Fox Business Network, is to debut on Oct. 15.

If News Corp.'s bid for Dow Jones is successful, the effects also could be felt at more than a dozen New England newspapers from Maine to Nantucket owned by the Ottaway chain, which is owned by Dow Jones. That group of local dailies and weeklies, acquired in 1970, includes the Cape Cod Times and The Standard-Times of New Bedford.

James H. Ottaway Jr., a longtime company officer and a major shareholder in Dow Jones, has criticized Murdoch's potential impact on the Journal, and recently echoed those contentions about the papers bearing his name.

"My concerns relate to his type of Australian-British journalism, in which the tradition is that the owner puts his personal and political biases on whatever his publications are," Ottaway said. "I would worry the Ottaway papers would be in the same danger."

But Ottaway also added, "I doubt he would pay much attention to them. It doesn't give him any power base."

News Corp. owns the Fox broadcast network, Fox News Channel, the New York Post, newspapers in the United Kingdom and Murdoch's native Australia, the Twentieth Century Fox movie and TV studio, and MySpace, an online social website.