The board of Dow Jones & Co. late Tuesday agreed to sell the company to Rupert Murdoch's News Corp. for $5 billion in cash and stock, pending the approval of the family that has controlled the newspaper for more than 100 years.
The publisher of the Wall Street Journal said that if enough shares held by the Bancroft family committed to supporting the transaction "promptly," then News Corp. would agree to proceed and the two companies would meet to review final terms.
Dow Jones said the Bancrofts had already begun to consider the deal. The family is split on the matter, leaving the prospects for Murdoch's bid uncertain.
Still, board support is a major step in the three-month process, which bogged down over issues of family pride and concerns about turning the most respected provider of business news over to a major financial player. Under the terms outlined Tuesday, some Dow Jones shareholders could receive News Corp. stock, reducing the tax effect of the deal.
With a favorable vote from directors, a verdict from the family could come by next week, and an all-clear would combine the ownership of the No. 2 U.S. paper by circulation with that of the New York Post, Fox News and a forthcoming Fox business channel.
If the Bancroft family still rejects the deal, the stock would almost certainly fall, since Murdoch's $60-a-share offer is 65% above where the shares had been trading.
The negotiations with News Corp. were handled by a five-member board committee that included a key attorney for the Bancroft family trusts, which hold shares on behalf of more than three dozen heirs.
The most delicate part of the process was the creation, at the insistence of Bancroft representatives, of a special committee to help protect the newsroom from attempts to steer coverage that relates to News Corp. or Murdoch's other interests.
The panel would have five members, jointly appointed by Dow Jones and News Corp., who could veto the firing or hiring of the top news and editorial executives at the newspaper. When any member steps down, the successor would have to be approved by the remaining members and News Corp.
In theory, News Corp. executives would have to go through those protected editors when they want to influence stories or columns, and those editors would feel safe in refusing to help. But some Journal writers believe that such a committee wouldn't go far enough to stop the possibility of meddling or the erosion of credibility.
