Billionaire Rupert Murdoch's odds of landing Dow Jones & Co. increased substantially Wednesday, when the family that controls the financial publishing empire said it would defer to company directors in sale negotiations.
The Bancroft family also will stop crafting a proposal to protect the editorial independence of the company's flagship property, the Wall Street Journal, a person close to the Bancrofts confirmed. Debate over that proposal within the family had slowed talks.
Because the Dow Jones board is obliged to pursue the best result for all shareholders, the handoff makes the $5-billion offer from Murdoch's News Corp. harder to beat for potential rivals. Prospective suitors include London-based Pearson teamed with General Electric Co.
Murdoch's $60-a-share bid represents a 65% premium to the price of Dow Jones shares before he made his offer. The stock rose more than 3% on Wednesday to $60.65.
A minority of the Bancroft family, which together holds 64% of the voting power at Dow Jones, wanted to sell to News Corp. when the offer became public last month. Others reject a sale to the controversial press baron at any price, and many in the middle would sell only with a binding agreement to keep Murdoch from changing news coverage to suit his business and ideological interests.
The Bancrofts all had hoped to return to Murdoch with an ethics plan last week. But after a logjam developed and the nearly three dozen members of the fractious clan failed to unite around the plan, the four family representatives on the Dow Jones board turned over their draft to all the directors at a regular board meeting Wednesday.
The family leaders and Dow Jones said in prepared statements that they had jointly decided that the full board should take the lead in negotiating with News Corp., entertaining rival offers or deciding to remain independent. Dow Jones said the Bancrofts "reiterated that any transaction must include appropriate provisions with respect to journalistic and editorial independence and integrity."
In taking control of the negotiations, the board is expected to "fine-tune" the ethics plan and use it in talks with News Corp., according to a person close to the process. But because the full board has a fiduciary duty to all shareholders, it is expected to be more concerned about getting top dollar than the Bancrofts have been.
