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Shareholders Approve Bid; Murdoch Owns Dow Jones

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By SETH SUTEL, The Associated Press

Published: December 14, 2007

NEW YORK - Rupert Murdoch completed his $5 billion-plus deal to acquire Dow Jones & Co. on Thursday, adding The Wall Street Journal to his global media conglomerate News Corp. and ending a century of control by the Bancroft family.

The changeover is expected to bring significant changes to the Journal, starting with a new management team announced late last week. Longtime News Corp. publishing executive Les Hinton will be chief executive officer, and Robert Thomson, editor of Murdoch's The Times newspaper in London, will be publisher. Several Dow Jones executives are departing, including CEO Richard Zannino.

Clearing its final hurdle, Dow Jones shareholders approved the deal Thursday by a margin of 60.3 percent. About 78 percent of the company's publicly traded shares were voted for the deal, while 54 percent of the Class B shares, which are largely held by the Bancrofts, were in favor.

Later Thursday, Murdoch, Hinton and Thomson addressed several hundred Wall Street Journal reporters in the paper's main newsroom. Murdoch, holding a microphone and standing on top of several boxes of copier paper, told the assembled crowd that he had high hopes for the newspaper's future. "Our aim is pretty simple," he said. "We have to entertain, inform, enrich all our readers in their lives and in their businesses. We must be the pre-eminent source of financial information and comment in the world."

Despite a general malaise affecting many U.S. newspapers, Murdoch has said he sees major potential in Dow Jones with the booming demand worldwide for business news and information. He also intends to beef up the paper's online operations and Washington coverage, and is contemplating changes to the Journal's Web site to further open it up to nonpaying subscribers.

The deal places Dow Jones, which had been family-controlled for more than a century, into the fold of Murdoch's global media conglomerate News Corp., which owns the Fox broadcast network, Twentieth Century Fox, Fox News Channel, satellite TV businesses in Europe and Asia, MySpace, and newspapers including the New York Post and a large group of newspapers in Australia and the United Kingdom.

The controlling shareholders of Dow Jones, the far-flung Bancroft family, initially had rebuffed Murdoch's approach last spring, but eventually he was able to win over enough of them to ensure the deal would be approved.

Murdoch's price of $60 a share represented a rich premium of 65 percent over the value of Dow Jones shares immediately before the bid became public. The shares of many other newspaper publishers have declined sharply this year on concerns about the companies losing more advertising dollars to the Internet.

Murdoch in August won his campaign to acquire the company after months of wrangling with the Bancroft family, who had controlled the publishing company for more than a century. The Bancrofts' roughly three dozen adult members are descended from the family of an early owner of Dow Jones, Clarence Barron.

Several family members, as well as former board member Jim Ottaway Jr. and a union that represents Journal reporters, voiced concerns that the paper's quality and independence would suffer under Murdoch.

Murdoch has said those concerns are unfounded, but he agreed to set up an editorial oversight board to allay those worries.

Dow Jones also owns Barron's, Dow Jones Newswires, the Factiva news database, several major stock market indicators including the Dow Jones industrial average, half of SmartMoney magazine and a group of community newspapers, which the company has said it is seeking to sell.

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