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The Wall Street Journal’s own story says it best: “Dow Jones & Co.’s 125-year history as an independent media company could be nearing an end.” The Bancroft family, which holds majority voting power, met with the DJ board Thursday during a special meeting, then announced that it will meet with News Corp. to discuss the $5 billion bid for the company. The family also said it would consider other options and other bidders. From the statement made to the board by Michael B. Elefante, a representative of the family who is also a member of the DJ board:
“After a detailed review of the business of Dow Jones and the evolving competitive environment in which it operates, the Family has reached consensus that the mission of Dow Jones may be better accomplished in combination or collaboration with another organization, which may include News Corporation. Accordingly, the Family has advised the Company’s Board that it intends to meet with News Corporation to determine whether, in the context of the current or any modified News Corporation proposal, it will be possible to ensure the level of commitment to editorial independence, integrity and journalistic freedom that is the hallmark of Dow Jones. The Family also indicated its receptivity to other options that might achieve the same overarching objective.”
The Bancrofts’ change of heart: The decision to consider other options ends one period of public speculation that began May 1 with CNBC’s scoop of Murdoch’s offer to acquire the company for a 65 percent-premium bid — and begins another. For most of the last 30 days, the question was could enough Bancrofts be swayed to move from “no” to “we’ll think about it” to keep the bid from disappearing. Now the questions are about price — will Murdoch go higher? is the current bid too high to leave room for other bidders? is there any other option that won’t shortchange other shareholders? — and structure — can the Bancrofts wangle enough editorial concessions to make a sale close to palatable for DJ’s journalists and let them off the family-heritage hook? Where, if at all, does current management fit in?
There’s also the issue of momentum: DJ has made serious progress in the last year and appears to be on the right track. Can that be maintained during the frenzy that accompanies sales talks? Keeping a tight timeline may be the key. The longer it to takes to make a decision, the more it could hurt.
Rafat adds: This news comes on the last day of WSJ’s flagship media conference D at Carlsbad, where most of the media and tech world executives spent the last two days, including News Corp COO Peter Chernin who spoke yesterday. Here’s what he said about the bid. Also, Dow Jones CEO Rich Zannino was notably absent from the conference (he was there last year), so now we know what he was busy preparing everyone for.