Murdoch, Dow Jones's Bancrofts Meet to Discuss Paper's Autonomy

Rupert Murdoch finally met face-to-face with the controlling family of Dow Jones yesterday, attempting to woo the wary owners into taking his $5 billion bid for the company and its crown jewel, the Wall Street Journal.

The biggest obstacle hindering Murdoch's News Corp. from acquiring the Journal, which he thinks would complement his global media empire, is the Bancroft family, which has been tied to Dow Jones for 105 years.

Yesterday, Murdoch brought two of his top executives and one of his sons, James, to the New York law firm that represents the Bancrofts for a four-hour sit-down.

"The parties had a constructive dialogue and have gone back to consider our positions," said a Bancroft family spokesperson. News Corp. and the Bancroft family agreed on the statement and said no further comment would be forthcoming. Dow Jones had no comment.

The meeting was designed as an icebreaker between the audacious, colorful, tabloid-owning Murdoch and the conservative guardians of the pinstriped Journal, a media mixed-marriage as unlikely as any.

But discussions quickly moved into the area of key concern for the Bancrofts -- whether Murdoch would allow the Journal to keep its independent editorial voice or whether he would meddle in its news pages, using it to advance his political and business goals, according to sources close to the situation who spoke on condition of anonymity because talks are ongoing.

The Bancrofts were represented by their three family members on the Dow Jones board: Christopher Bancroft, Leslie Hill and Elizabeth Steele, the sources said. Also attending was director Michael B. Elefante, who is aligned with the Bancrofts.

A second meeting has not been scheduled but is likely soon.

Murdoch has pointed to his London Times to show that he allows his editors to run a serious paper independently and to be critical of countries where he does business, such as China. But critics have accused him of kowtowing to the Chinese government for removing the BBC from his satellite television feed to that country after the Chinese government complained of the BBC's human rights coverage.

Yesterday's meeting was held at the Manhattan law firm of Wachtell, Lipton, Rosen & Katz, which represents the Bancrofts and is a six-block walk from News Corp. headquarters. Accompanying Murdoch and his son were News Corp. Chief Financial Officer David DeVoe and general counsel Lawrence Jacobs.

Murdoch made his surprise bid for Dow Jones in an April letter to the board. The bid became public in early May. Murdoch had asked to meet with the Bancrofts to answer their questions and provide assurance that he would maintain the editorial independence of the Journal.

Though the Bancrofts own only 24 percent of all Dow Jones stock, they hold 64 percent of voting power through a dual-class ownership structure, similar to those at the New York Times Co. and The Washington Post Co.

The family resisted Murdoch's overtures until Thursday, when it relented to pressure from other investors and said in a statement that the current ownership may no longer be tenable. The family agreed to meet with Murdoch. Following the lead of their controlling shareholders, the Dow Jones board said it would "consider strategic alternatives" for the company, essentially putting it up for sale.

Murdoch has not raised his $60-per-share offer -- well above the trading price of Dow Jones stock before his bid -- but has told the Bancrofts that he would place a family member on the board of Dow Jones and would create an editorial board that would act as a buffer between him and the Journal.

Shares of Dow Jones jumped $8 per share Thursday after the Bancrofts agreed to meet with Murdoch. They closed at $60.16, down $1.04, yesterday. Shares of News Corp. closed down 12 cents, at $24.10.