Dow Jones agrees to be sold

NEW YORK -- Rupert Murdoch is poised to win control of Wall Street Journal publisher Dow Jones & Co. after the company's board approved his $5 billion buyout offer late Tuesday, a person familiar with the matter said.

Murdoch will be clinching one of the great trophies of U.S. journalism and a newspaper that is considered required daily reading among the business and power elite.

The deal will also expand Murdoch's already massive global media and entertainment empire News Corp.

The boards of News Corp. and Dow Jones have both approved the deal, a person with knowledge of the matter said late Tuesday, but this person asked to remain anonymous because the deal had not been completely finalized and there was no formal announcement yet.

News Corp. had said it would only agree to move ahead if the deal had sufficient support from Dow Jones' controlling shareholders, the Bancroft family.

The Journal reported that a key Bancroft family trust had reversed itself and decided to support the deal, meaning that votes representing about 37 percent of Dow Jones' shareholder vote were now in favor of selling to Murdoch.

A Denver-based family trust with about 9 percent of the company vote had been holding out for a higher price but agreed to the deal after Dow Jones' board said it would set aside funds to pay the Bancroft family's advisory fees, which could total at least $30 million, the paper reported.

Combined with the 29 percent of Dow Jones shares that are publicly held and likely to support Murdoch, the deal appeared to have critical mass.

The deal comes as newspapers across the country face a deepening crisis of slumping revenue as readers flock to the Internet for information and entertainment, and advertising dollars chase them there.

The deal for Dow Jones represents the third time in just over a year that a major newspaper publisher has been pushed into a sale. Last year, Knight Ridder Inc. was forced to sell itself following a shareholder revolt over poor financial performance, and this year Tribune Co. agreed to a going-private transaction orchestrated by the real estate magnate Sam Zell.

The Bancroft family, which collectively holds 64 percent of Dow Jones' vote, was deeply divided over selling to Murdoch, and some members actively sought alternatives to his bid. One of them, Leslie Hill, resigned Tuesday as a director of Dow Jones as the final deal was taking shape, the Journal reported.

Several family members, a union representing Journal reporters, and former board member Jim Ottaway Jr. expressed concerns about preserving the Journal's quality and independence under Murdoch, saying there was potential for corporate meddling in the Journal's news coverage.

German publishing executive Dieter von Holtzbrinck resigned as a director of Dow Jones two weeks ago after the board tentatively signed off on the deal, saying he was worried about how the Journal would fare under Murdoch.

Murdoch says any concerns about corporate interference in the Journal's news pages are unwarranted. News Corp. has agreed to create a committee that would have to sign off on any decision to hire or fire top editors at the paper.

Dow Jones shares rose sharply Tuesday on hopes that a deal was close, and were getting closer to Murdoch's offering price of $60 a share, indicating growing confidence the deal will go through. Dow Jones shares rose $5.82, or 11.3 percent, to close at $57.38. They gained another 47 cents in after-hours trading.

In a lengthy letter to fellow family members last week, Bancroft descendant Crawford Hill urged them to vote for a sale, saying the family hadn't taken an active enough role in overseeing Dow Jones and was now "paying the price for our passivity over the past 25 years."

On Tuesday, Thomas Walker, who worked on the global copy desk at The Wall Street Journal, said outside of the Dow Jones building in lower Manhattan that he was quitting rather than see the paper sold to Murdoch. "I don't want to work for the man," he said.

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Associated Press Writer Sonia Moghe contributed to this report.