News Corp/Dow Jones deal hangs in balance

31-07-2007

News Corp/Dow Jones deal hangs in balance
Rupert Murdoch's News Corp is still encountering strong resistance to its $5 billion (£2.46 billion) proposed offer for the Dow Jones media group.

Several weeks after a bid was launched, the lukewarm response of the influential Bancroft family remains the major stumbling block.

The Bancroft family owns a 64 per cent stake in Dow Jones, which counts the Wall Street Journal among its principal publications.

Two major Bancroft shareholders, Christopher Bancroft and a group of trusts managed by law firm Holme Roberts and Owen, remain opposed to the takeover.

The Dow Jones board has already accepted News Corp's offer, with a joint statement from the family expected later today.

Yesterday a News Corp spokesman said it was "highly unlikely" the group would proceed with its offer, sending Dow Jones shares tumbling.

But the Wall Street Journal itself quotes a source close to the deal as saying the takeover could still take place:

"Everyone is sticking to their guns in the hope that [Mr] Murdoch will come up with more money," the unnamed source said.

According to the Wall Street Journal, talks yesterday centred on News Corp's insistence that Dow Jones cover its own advisory fees for the Bancrofts.

But Dow Jones reportedly said the family deserved help with the fees, estimated to be about $30 million (£14.8 million), due to the complexity of its trusts.


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