Dow Jones, Murdoch reported close to deal

Dow Jones & Co. and News Corp. were reportedly moving closer late Monday night to a final agreement on the sale of the publisher of The Wall Street Journal.

In its online edition, The Journal reported Dow Jones was negotiating a deal for its board to create a fund to cover payments to firms advising its majority owners, members of the Bancroft family, on the $5 billion takeover offer from Rupert Murdoch's media conglomerate.

News Corp would assume those liabilities — which could total $30 million — if it bought Dow Jones, The Journal reported.

The Journal said the money would be paid only if two key holdout shareholders agreed to the News Corp. deal. With their backing, News Corp. would have enough support from the Bancroft family to seal the deal, The Journal said.

The negotiations were reported after a 5 p.m. deadline came and went for the Bancroft family, which has controlled Dow Jones for a century, to tell the family's lead trustee how they would vote on Murdoch's takeover offer.

Earlier Monday, Wall Street became increasingly skittish about Murdoch's prospects for clinching the deal.

A News Corp. spokesman said the company was "highly unlikely" to go ahead with the deal if the level of support among the Bancrofts remained at just 28 percent of the shareholder vote, which The Journal reported was the commitment as of Sunday.

The spokesman asked not to be named due to the sensitive nature of the discussions. News Corp. has said it wants sufficient support from the Bancrofts to avoid a potential messy showdown later.

The family collectively controls 64 percent of the shareholder vote of Dow Jones through a special class of stock, but only about half of them need to support the deal for it to succeed.

The Bancrofts are a diverse clan, and their voting interest is held through a complex series of privately held trusts, making the outcome difficult to predict.

Over the past few weeks, investors have been steadily pushing Dow Jones shares below the $60 price Murdoch has offered, reflecting increasing doubts about the deal going through.

The shares took another tumble Monday after The Journal first reported that News Corp. was displeased with the level of support among the Bancrofts.

Many of Dow Jones' public shareholders are expected to support the deal, which represents a rich premium over the mid-$30s price Dow Jones shares had before the offer became public in May.

The Bancroft family has been deeply divided over whether to sell to Murdoch, largely over concerns that his management style could affect the papers' coverage.