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News Corp's Dow bid now faltering Murdoch 'close' to Dow Jones deal
(about 10 hours later)
Rupert Murdoch's News Corporation has admitted it is now "highly unlikely" it will proceed with its $5bn (£2.5bn) offer for the Dow Jones media group. Rupert Murdoch's News Corporation is moving closer to a deal to buy US media group Dow Jones, the Dow-owned Wall Street Journal (WSJ) has reported.
It said this was because of the reported present level of opposition from the Bancroft family, which owns 64% of Dow Jones' voting shares. Its $5bn (£2.6bn) bid was in peril when a Monday deadline passed for members of the Bancroft family - which controls the firm - to decide on the bid.
With the Bancrofts expected to make a statement later on Tuesday, reports say less than a third are backing the deal. News Corp reacted by saying it was "highly unlikely" a bid would go ahead.
The news came as Brad Greenspan said he had financial support for a rival bid. But the WSJ said an arrangement whereby Dow Jones may pay $30m in deal-related costs could sway some family members.
Mr Greenspan, the founder of the MySpace social network, said he had now gained the backing of five investor groups interested in buying a stake in Dow Jones to thwart News Corp's bid. Down to the wire
Editorial assurances According to the newspaper, News Corp's board will meet later on Monday to decide whether to proceed with the bid and force Dow Jones shareholders to vote on the deal.
The Bancroft family said last week that it had held "very productive" talks with News Corp, and the bid had also gained the backing of the Dow Jones' board. The bid has attracted criticism from figures within the media industry who believe it could threaten the Wall Street Journal's editorial independence, although News Corp has vowed to uphold the paper's independence.
News Corp first tabled its bid for Dow Jones on 1 May. The WSJ reported that Bancroft family members controlling 29% of voting shares in the firm now favoured a deal.
The Dow Jones' main newspaper title is the Wall Street Journal. Taking into account non-family members said to favour a deal, this could give News Corp control of the business.
Rupert Murdoch has promised to maintain the Wall Street Journal's editorial independence if News Corp's bid is successful. Bancroft members control 64% of the firm's shares through a variety of trusts and are split over the merits of the deal.
The WSJ said that the position of Christopher Bancroft and a number of trusts was likely to be vital in determining the success of the bid.
It said discussions were hingeing on a proposal for the Dow Jones board to create a fund to cover the Bancrofts' expenditure on corporate advisory fees, thought to be about $30m.
News Corp first tabled its bid for Dow Jones on 1 May. It has since won the backing of Dow Jones' board, although one director subsequently resigned in protest.
A rival suitor is waiting in the wings, with Brad Greenspan, founder of the MySpace social network, saying he has gained the backing of five investors interested in buying a stake in Dow Jones to thwart News Corp's bid.