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Dow Jones agree on WSJ editorial integrity

Saturday, December 29, 2007

News Corp. has reached a verbal agreement with Dow Jones to safeguard the editorial integrity of the Wall Street Journal, removing a major hurdle in its hostile takeover bid, a source close to the negotiations said Tuesday.

The issue of editorial independence of the leading US business newspaper has been a key obstacle in the five-billion-dollar unwelcome offer made last month by Rupert Murdoch's sprawling media group.

The Wall Street Journal reported Tuesday some "open items" remained unresolved, but the two sides had essentially forged an agreement.

The source familiar with the talks told AFP the deal was not yet final.

"We're close to agreement, but no agreement has been put down on paper," a person familiar with the situation told AFP.

"Are the parties making progress? Absolutely. An ad hoc committee has been meeting with their opposite numbers from News Corp. for several days now and their discussions are continuing.

"Progress is being made on editorial integrity and the independence front," said the person, who requested anonymity.

Any takeover agreement requires the approval of the Bancroft family, the controlling shareholders of Dow Jones, one of America's most storied media firms.

Union officials, opposed to the News Corp. bid, said the Bancrofts still have the ultimate say on any deal.

"This group won't be sold unless the Bancroft family accepts," Steve Yount, of the IAPE union which represents Dow Jones & Co. employees, told AFP.

"The family gave a very specific set of conditions. And I have seen no sign that they changed their position."

The Bancrofts originally rebuffed Murdoch's takeover approach in May, citing concerns about editorial independence, but industry analysts say the family might be warming to News Corp.'s bid which is valued at 60 dollars per Dow Jones share.

Some Wall Street Journal journalists are opposed to a tie-up with News Corp., claiming Murdoch has interfered in the editorial decisions of some of his media outlets. Their stance appears to backed by some members of the Bancroft family, according to US media reports.

The ad hoc committee, which includes Bancroft representatives, has led some of the ongoing negotiations with News Corp. since Murdoch met with several family representatives earlier this month in a bid to allay their concerns, according to the person familiar with the situation.

Murdoch had proposed setting up a system that would guarantee the editorial independence of the Journal similar to the one used by the Times newspaper of London, one of his high-profile British assets, which his media empire acquired in 1981. The Times has a special committee which is empowered to review the appointment of an editor-in-chief.

Dow Jones shareholders reportedly have been putting pressure on the Bancrofts to accept Murdoch's offer because of the handsome premium News Corp. is offering for the company.

The Bancrofts have nonetheless signaled they will entertain takeover offers from other potential bidders, although there are no other known bidders at this stage.

US conglomerate General Electric said last week that it would not be teaming up with Britain's Pearson, the owner of the Financial Times, to mount a possible takeover bid for Dow Jones, dashing the hopes of some Dow Jones employees opposed to News Corp.'s bid.

Posted by MOHAMED SAID at 4:10 PM  


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