UPDATE: Board Approves Murdoch 'Editorial' Plan, But ...

By: E&P Staff Shortly after noon on Tuesday, Reuters and CNBC reported that Rupert Murdoch's News Corp. and Dow Jones & Co. Inc. have agreed to a structure to protect the editorial independence of the company's Wall Street Journal and Dow Jones Newswires.

Murdoch has offered $60 a share for the company, which no one is likely to top. Others have expressed interest in the past two weeks and it's not known if they are still in the hunt.

The Wall Street Journal reports this afternoon: "The two sides finalized the last points on the agreement this morning, these people said. The accord paves the way for the sale of the publisher of The Wall Street Journal to Rupert Murdoch's media conglomerate for about $5 billion."

The next step is for the Dow Jones' controlling family, the Bancrofts, to agree, which is no sure thing, CNBC's David Faber reported, saying it was like "herding cats."

Faber said reaching a final deal to approve a News Corp. buyout may not happen for a week, at earliest.

The Journal puts it this way: "Though the family has overcome some of its previous doubts about selling the company, the situation remains fluid, and some members continue to privately express resistance to a deal. The family's main concern has been protecting the editorial integrity of the Journal and other Dow Jones properties.

"Last week, the Bancrofts ceded the negotiations over editorial protections to the company's board, which largely supports the sale. But the family's control of most of the super-voting shares in the company gives it ultimate veto power, and the family has been ambivalent from the start.

"Michael B. Elefante, the Bancrofts' lead trustee and a Dow Jones director, will be responsible for taking the temperature of the family on an agreement, these people said."

But The New York Times warned in a story for Wednesday that "some people close to the talks cautioned that certain details on editorial independence remained to be settled, and said they were even reluctant to call it an agreement yet.

"The tentative accord has not been shown to the Bancroft family, owners of a controlling interest in Dow Jones, who can block any deal, according to a person close to the family who, like others who spoke about the agreement, was granted anonymity because he was not authorized to discuss it. People close to the company and the family said the Bancrofts would be formally briefed only once there was a tentative deal on all issues ? newsroom control, price and everything else ? that the Dow Jones board and News Corp. believe both can accept."


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