Murdoch's Dow Jones bid opposed by Democrats

Televisionpoint.com Correspondent
As the board of Dow Jones met on Wednesday to consider a $5 billion takeover offer from Rupert Murdoch, there were signs of a backlash in political circles at the prospect of the Australian-born billionaire controlling America's leading business journal.

Murdoch's $60-a-share bid for the Wall Street Journal's parent company is part of a strategy by the News Corporation chief to gain a franchise in financial news of the kind he previously built in covering sports. He faces an uphill struggle: Dow Jones's controlling Bancroft family has rejected Murdoch's approach and political analysts warned that Democrats in Congress were likely to make the chances of success difficult.

Morris Reid, a leading Democrat strategist who served in the Clinton administration, said the majority party in Congress was likely to do everything it could to slow a potential deal, including holding hearings on Capitol Hill, putting pressure on regulators for an investigation and shopping around friendly billionaires for a rival purchaser.

"The Wall Street Journal is the economic journal of record in the United States. When you have someone like Rupert Murdoch, who has a track record of right-wing conservative journal ism, I'm not sure that's in the Democrats' best interests." said Reid.

Dow Jones's share price slipped 1.3 per cent to $55.47 in early trading on the New York stock exchange as the likelihood of a quick deal receded. Dow Jones directors met advisers on Wednesday from the investment bank Goldman Sachs, while it emerged that the Bancroft family had retained Merrill Lynch.

The Bancrofts, a disparate clan of some 35 people, control 65 per cent of Dow Jones shares and have announced that they will vote just over 50 per cent of the company's stock against the offer. Relatives, however, are far from unanimous. The Murdochowned New York Post, reported that there were "at least 10 known dissidents" within the family who were keen to sell.

A publicity-shy family, the Bancrofts inherited control of Dow Jones on the death of Barron's magazine founder Clarence Walker Barron in 1928. They meet once a year for a Bancroft family forum to which all relatives over the age of 18 are invited. A 2003 investigation by the New Yorker described them as, among other professions, "writers, investment bankers, equestrians and philanthropists".

News Corp's offer has put the strength of the family's commitment to Dow Jones under strain. Younger descendants are known to be impatient with the company's waning share price and there has been tension over the way dividends are distributed among relatives.