After weeks of negotiations, members of the Bancroft family, which represent 37 percent of the voting shares of Dow Jones (more than half of their 64 percent held), agreed to back the deal. The companies valued Dow Jones at $5.6 billion — or $60 a share — but it is unclear if that number includes assumption of debt. Another 29 percent of Dow Jones shares are publicly floated, and most analysts expect the overwhelming majority of those shares to be voted in favor of a deal.
"It is our most fervent hope that in the years to come, The Wall Street Journal will continue to enjoy, and deserve, the universal admiration and respect in which it is held all over the world," a Bancroft family spokesperson said in a press release.
Under the terms of the deal, a member of the Bancroft family or another mutually acceptable person would be appointed to News Corp.'s board of directors.
The deal marks the end of what had been nearly four months of wrangling, infighting and controversy since News Corp. Chairman Rupert Murdoch first broached the idea of acquiring Dow Jones, which publishes the Wall Street Journal, Dow Jones Newswires, SmartMoney, MarketWatch and Barron's. Murdoch suggested a deal in March during a meeting with Dow Jones Chief Executive Rich Zannino and made a formal offer to the board in April.
Initially, the Bancroft family didn't act on the offer, then reversed course and said it would consider not only the News Corp. offer, but also any other competing bids. Despite the efforts of some Bancroft family members and the union that represents a large group of Dow Jones employees, no credible counteroffer emerged.
The deal exposed deep divisions within the Bancroft family, which inherited the shares from Clarence Barron, who bought Dow Jones at the beginning of the 20th century. Many of the younger members of the Bancroft clan wanted the deal to cash out on their shares, which are controlled by a series of trusts. Older members, however, wanted to keep the company, arguing they could best maintain the editorial independence of the Journal. Indeed, the Bancrofts pushed for a plan that would maintain the independence of most of Dow Jones's news-gathering operations, though some critics have complained that plan didn't go far enough.
The rift was seen when Dow Jones's board met two weeks ago to vote on the deal. Two Bancroft family members on the board, Christopher Bancroft and Leslie Hill, didn't vote to approve the acquisition, with Bancroft leaving the meeting early and Hill abstaining. But another Bancroft, Elizabeth Steele, did approve the bid, as did Michael Elefante, an attorney who represents many Bancroft family trusts.
The deal also caused deep rifts within Dow Jones's newsrooms. Many reporters, particularly at The Wall Street Journal, were vocal opponents of the acquisition, and the company's union reached out to third parties like supermarket mogul Ron Burkle to make a white-knight bid. But many editors and reporters — many working for Dow Jones's other news properties — supported the offer, saying it was the best way for Dow Jones to grow.
Dow Jones shares have soared from the high-$30 range when the deal was first leaked in May to just short of the $60 offer price. In recent days, however, the stock has stumbled somewhat, as traders tried to handicap the Bancroft vote.
The acquisition is expected to close in the fourth quarter, the companies said.
News Corp. is the parent company of FOXNews.com and FOXBusiness.com.