Rupert Murdoch's Dow Jones bid may fail

Televisionpoint.com Correspondent
Shareholders with a controlling voting stake in Dow Jones and Company, owner of the prestigious Wall Street Journal, will oppose a $ 5 billion bid for the group by Rupert Murdoch's News Corp.

The Wall Street Journal said on Wednesday that a representative of the Bancroft family told the board at Dow Jones there were sufficient shareholders with voting power to thwart a takeover offer for the publisher, launched by News Corp. on Tuesday.

Widely spread out, the Bancroft family holds 24 percent of the capital but more than 62 percent of the vote in Dow Jones. But the front-page article in the European edition of the Journal added: "It isn't clear if the family is opposed to an offer from News Corp.'s Rupert Murdoch or if it is simply trying to get Mr. Murdoch and other potential bidders to sweeten their offers."

The Bancrofts' negative reaction came at the end of a day of frantic activity. News of News Corp's offer, made in a private letter to the family, had earlier leaked raising Dow Jones's stock by 54 per cent to $56.20.

Apart from publishing the Journal, Dow Jones is also a major provider of financial information, has a newswire service and a weekly magazine, Barron's. The company also owns a data operation which compiles America's Dow Jones stock market index.

Murdoch wants to buy the company to turn his News Corp empire into a global leader in business journalism, an area which he sees as particularly profitable in the internet era.

News Corp is already due to launch a 24-hour business television channel later in the year and some commentators suggested yesterday that Mr Murdoch's interest could be closely connected to the imminent launch of his Fox business chan nel. A takeover would allow him to break up an existing deal whereby Dow Jones provides financial information to rival channel CNBC.

Interviewed on his Fox News network, Murdoch described the Wall Street Journal as "the greatest newspaper in America and one of the greatest in the world". "It's got great journalists and great management but it's got a rather confined capital - it needs to be part of a bigger organisation to be taken further," he said.

The Bancroft family which, owns 65 per cent of the voting shares, appears to be split on the deal. Younger members are said to have been pressing for a sale for years, fearing the declining value of the family fortune, although older relatives are believed to be reluctant.