Dow Jones & Co. to consider Murdoch offer

NEW YORK — The family that controls Dow Jones & Co., publisher of The Wall Street Journal, said late Thursday that it would consider a bid from media mogul Rupert Murdoch to buy the company, as well as other potential offers.

The Bancrofts said in a statement that they would meet with Murdoch to discuss his bid, which became public in early May. The statement shows a softening of the position of the family members, who had previously indicated that they intended to block Murdoch’s bid to buy the company.

The Bancrofts said the family “remains resolute in its commitment to preserve and protect the editorial independence and integrity of The Wall Street Journal,” but had also concluded that “the mission of Dow Jones may be better accomplished in combination or collaboration with another organization, which may include News Corporation.”

Despite the Journal’s tremendous prestige and clout in the business world, Dow Jones remains a relatively small company compared with large media operators such as Murdoch’s News Corp., whose operations such as Twentieth Century Fox, Fox News Channel and MySpace span the globe. The $5 billion offer that Murdoch made for Dow Jones could easily be paid out of News Corp.’s cash stockpile.

Murdoch has said he would invest in the Journal and ensure its editorial independence, something that the Bancroft family as well as employees of Dow Jones say is paramount to the company’s mission.

However, the union representing Journal employees has been steadfastly opposed to Murdoch’s overture, saying he would likely damage the paper’s quality and compromise its independence. Jim Ottaway Jr., a former board member who controls 5 percent of the company’s voting power, has said he is also opposed to Murdoch’s bid.

Like several other newspaper publishers including The New York Times Co. and The Washington Post Co., Dow Jones is a public company but remains controlled by a family through a special class of shares with powerful voting rights.

Family control, its advocates say, is intended to insulate newspapers from short-term financial demands from shareholders and to safeguard their independence and protect their mission of public service.

Murdoch, for his part, has said he also understands the importance of family stewardship as his own company is controlled by him and family trusts, albeit to a lesser degree than the control exercised by the Bancrofts of Dow Jones, the New York Times’ Sulzbergers and the Grahams of The Washington Post.

Also, Dow Jones has an important difference from the Times and The Washington Post in that no family members are currently involved with the company’s day-to-day management. The Bancrofts are also numerous and geographically diverse, with some three dozen adult family members spread out over the country.

From the beginning of Murdoch’s overture to Dow Jones, it was clear that the Bancrofts were divided. While they control 64 percent of the shareholder vote of the company, they had said earlier that just 52 percent of the voting power was lined up against Murdoch.

And with Murdoch’s offer of $60 per share representing a huge premium of about 65 percent over the company’s share price before the bid became public, the approval by purely financial investors seems all but assured. Dow Jones shares rose 46 cents to $53.31 Thursday, then gained more than 12 percent to $59.79 in extended trading on news of the Bancrofts’ statement.

It remains far from certain, however, that Murdoch will wind up winning Dow Jones, a company he has long been interested in owning. In meeting with Murdoch and expressing a willingness to consider other bids, the Bancrofts may be trying to encourage other suitors to step forward.

Dow Jones said in a statement that its board would consider the Murdoch bid as well as other potential alternatives, and it would have a board representative present at the Bancroft family’s discussions with News Corp. and Murdoch.

A longtime newspaper owner with many papers in England, Australia and the New York Post, Murdoch has sought to allay the Bancrofts’ concerns in a recent letter, saying he would take a series of steps to ensure the Journal’s integrity, including setting up an independent oversight board.

“We don’t believe the promises Mr. Murdoch has made can be trusted,” union leader Steven Yount said in a statement late Thursday. “Dow Jones must remain an independent company if it is to prosper both as business and a journalistic enterprise,” adding that the union would do “everything in its power” to ensure Dow Jones remains an independent and trusted source of information.

Murdoch has also said he wants to expand the Journal’s reach overseas and online, as well as tap its resources for a new business-oriented cable news channel he plans to launch.

Within Dow Jones, however, opposition to Murdoch remains strong. Writers in the Journal’s China bureau have expressed staunch opposition to his bid, and Ottaway and others say they’re concerned he might soften coverage of China in particular, where Murdoch has business interests.