Aug 01 2007
Rupert Murdoch claimed victory today, Wednesday 1st Aug 2007, in his battle to acquire Dow Jones after securing support from enough Bancroft family members to clinch majority backing for his $5.6 billion cash offer for the owner of The Wall Street Journal. The breakthrough came after nearly four months of often torturous negotiations between the media mogul and the fractious clan of heirs to a family which has controlled the leading US financial newspaper for more than a century.
Mr Murdoch overcame objections from inside and outside the family that his hands-on editorial style and tabloid newspaper sensibility would tarnish the Journal’s reputation for high editorial standards and independence. The 76-year-old mogul, who has in the past 50 years built News Corp from a small Australian newspaper group into a global media giant, has had his eye on the Journal for at least a decade.
The Bancrofts control 64 per cent of Dow Jones’s voting shares, held through a complex series of privately-held trusts. More than half the family votes, representing more than 30 per cent of Dow Jones’s overall voting shares, are needed for News Corp to be confident that its offer will be voted through by a majority of the company’s shareholders. A turning point came on Tuesday after a Bancroft family trust holding around 9 per cent of Dow Jones’s voting shares dropped its push for a higher price from Mr Murdoch. Instead, it agreed to back the deal after receiving assurances that the family’s fees would be paid as part of the deal.Murdoch’s $60 a share offer, a 65 per cent premium to Dow Jones’ share price before news of News Corp’s interest emerged carried the day after he agreed to a last-minute deal sweetener by helping to cover millions of dollars of legal and advisory costs incurred by the Bancroft family. By adding it to a stable of media properties that run from tabloids such as The Sun in London and the New York Post, to Fox News Channel and MySpace, Mr Murdoch cements his position as the dominant force in global media.
Based on Murdoch’s vision for Dow Jones to establish The Journal as the rival to The Times in setting the daily news agenda of the country, there is little doubt that he will directly aim at luring both readers and advertising away from The New York Times and The Financial Times, The Journal’s closest rivals. His strategy will probably include aggressively undercutting advertising and investing heavily in editorial content – reported New York Times.
When he repurchased The New York Post in 1993, he focused on raising the paper’s circulation by cutting the cover price of the paper several times and handing out copies free. “If he hadn’t come in, there wouldn’t have been a New York Post,” said Jerry Fragetti, senior vice president for media and operations at Newspaper National Network, who worked as chief financial officer of The Post in the 1980s and as an executive for the News Corporation in the early 1990s.
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August 1st, 2007 by financetwitter
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