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Rupert Murdoch has won his battle to gain control of the Wall Street Journal and end the Bancroft family's 105 years of stewardship.
News Corp will pay US$5 billion ($6.61 billion) for the Journal's owner Dow Jones after both boards yesterday approved the sale.
The offer is 65 per cent higher than Dow Jones' stock price on April 30, the day before Murdoch's proposal was announced.A divided Bancroft family accepted News Corp's offer after three months of debate over Murdoch's likely impact on news coverage at the Journal.
The paper reported yesterday that Murdoch won enough support to complete the purchase when Bancroft family members controlling at least 38 per cent of the New York company approved the deal.
"Murdoch had the Bancrofts in a corner," said Susan Tifft, a Duke University professor of journalism and public policy. "If they didn't take his offer, the stock was probably going to zoom down and everyone stood to lose a lot of money."
Shares of Dow Jones jumped 11 per cent on the news.
The purchase of the Journal, the second-biggest United States newspaper by circulation after USA Today, Dow Jones Newswires and financial magazine Barron's satisfies Murdoch's long-expressed desire to own Dow Jones.
The deal adds Dow Jones' assets to News Corp's more than 110 newspapers, stretching from Sydney to New York to London, film and TV studios and the Fox News cable network.
The Bancrofts hold about 64 per cent of the voting power at Dow Jones and some family members resisted a sale to Murdoch, concerned that he would influence editorial content.
Leslie Hill, a Bancroft family member opposed to the agreement, resigned from the board yesterday.
"It's a bad thing for Dow Jones and American journalism that the Bancroft family could not resist Murdoch's generous offer," James Ottaway jnr, a former Dow Jones executive whose family owns about a 7 per cent stake in the company, said.
"I hope Murdoch, and whoever follows him at News Corp, will keep his promises to protect and invest in the quality and integrity of Dow Jones."
Murdoch, 76, took a step towards acquiring Dow Jones in June when News Corp agreed to the Bancroft family's demand for a guarantee protecting the Journal's editorial independence.
Newspaper analyst John Morton said Dow Jones would bolster News Corp's planned financial news channel and lure advertisers from CNBC.
Some Bancroft family members sought to attract other buyers for the company they have controlled since 1902, 20 years after it was founded by Charles Dow, Edward Jones, and Charles Bergstresser.
- BLOOMBERG
