Last updated: July 17, 2007 4:42 am

Murdoch reaches tentative Dow Jones deal

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Dow Jones directors are expected to begin formal deliberations on a $5bn offer from Rupert Murdoch’s News Corp on Tuesday evening, according to people familiar with the matter.

The review follows the reaching of a tentative agreement late Monday between a special committee of the board of Dow Jones, the publisher of the Wall Street Journal, and News Corp negotiators.

The Dow Jones group, which included Richard Zannino, chief executive, failed to persuade Mr Murdoch to raise his offer above $60 a share, it is understood.

In addition to price, the two sides also discussed the possibility of nominating Paul Steiger, the Journal’s former managing editor, to take a seat on News Corp’s board of directors.

If the News Corp offer secures backing from the full board, it would then require approval from members of the Bancroft family, who control 64 per cent of Dow Jones’ voting power.

The family includes about 35 adults, and they do not have to vote their shares as a block. That has led some observers to predict that their deliberations could take a week or longer.

Some Bancrofts remain staunchly opposed to selling to Mr Murdoch at any price, fearing he would tarnish the journalistic integrity of a company they have overseen for more than a century.

In an effort to head off a sale, they have launched efforts in recent days to line up other potential suitors, or raise financing to allow certain family members to cash out their inheritance without losing control of the company. But those efforts do not appear to have gained traction, according to people familiar with the matter.

Dow Jones, News Corp and a Bancroft spokesman declined to comment on Monday.

Mr Murdoch’s offer, delivered in mid-April, represents a 65 per cent premium for Dow Jones, and values the company at $5bn. The Bancrofts initially opposed it, but later opted to reconsider.

Several people close to the negotiations expect this week to be a crucial period in determining whether News Corp will prevail. The two sides only recently began to discuss price after bargaining for weeks over a set of editorial safeguards intended to protect the Journal’s editorial independence in the event of a sale.

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