Rupert Murdoch’s News Corp. appeared to be making progress in talks with Dow Jones & Co. over measures to protect The Wall Street Journal’s editorial independence.
However, any potential deal would still need to be approved by Dow Jones’ controlling shareholders, the Bancroft family, which had initially rebuffed Murdoch’s approach.
The Bancrofts, who have controlled Dow Jones for more than a century, have said their main concern is protecting the Journal’s integrity. Altogether they control 64 percent of Dow Jones’ shareholder vote through a special class of shares with 10 times as many votes as the ordinary publicly traded shares.
The New York Times and the Journal reported Monday that News Corp. responded to proposals from Dow Jones about an editorial oversight board that would be created to protect the Journal from corporate interference and that the two sides appeared to be moving closer together. Dow Jones and News Corp. both declined to comment.
With no other serious bidders in sight for Dow Jones, Murdoch could wind up winning control of the company if the two sides can agree on measures to safeguard the Journal’s news coverage. If they do agree, the discussions would presumably move on to other issues including price.
Murdoch has offered $60 a share for Dow Jones, a huge premium of about 65 percent above the mid-$30s share price Dow Jones was trading at prior to the bid being made public in early May. Many on Wall Street believe the price, which values Dow Jones at $5 billion, is too high for other bidders to match.
Dow Jones shares fell $1.30, or 2.2 percent, to $57.50 Monday.
Last week two things happened to accelerate the talks between Dow Jones and Murdoch, which had been in slow gear for the past several weeks as the Bancroft family debated proposals for protecting the Journal.
General Electric Co., which owns the business news cable channel CNBC, and Pearson PLC, a London-based educational publisher that owns the Financial Times newspaper, said they had abandoned early-stage talks about combining CNBC, the FT and Dow Jones. Also, Dow Jones’ board said it was taking the lead in pursuing talks with News Corp., taking over from the Bancroft family.