Murdoch on verge of €3.6bn Dow deal

Dow Jones has dismissed as premature a report that Rupert Murdoch has succeeded in his $5 billion (€3.67 billion) bid to buy the company, which owns the Wall Street Journal. The deal is expected to go ahead next week, however, after the two sides reached agreement this week on safeguards to protect the paper's editorial independence.

Citing Dow Jones board sources yesterday, the British weekly The Business reported that negotiations on price and matters of principle have been completed, and that, although some details remain to be resolved, none is regarded by either side as a deal-breaker.

Dow Jones yesterday confirmed that it had agreed a deal on editorial independence with Mr Murdoch's News Corporation but insisted that negotiations on other matters are continuing.

"There is no change in the status of the discussions . . . News Corp is continuing to conduct due diligence, and the negotiations are not complete," said Roy Winnick, a spokesman for the Bancroft family, which controls Dow Jones.

Mr Murdoch's offer in April of $60 a share was 67 per cent higher than the market price for Dow Jones at the time the three dozen members of the Bancroft family demanded assurances about editorial independence before agreeing to sell.

Although the Bancrofts own less than 25 per cent of the company, their Class B shares give them 64 per cent of the voting rights in Dow Jones. Pressure from younger members of the family appears to have persuaded older members to support the sale.

Neither side has made public the details of their agreement on editorial independence, although leaks suggest that News Corporation will be free to hire and fire editors and publishers. An independent board will have a veto on senior appointments and the deal is said to be tougher than that agreed by Mr Murdoch when he bought the Times and the Sunday Times in 1981.

The advisory board at Mr Murdoch's London papers has had little or no impact since it was set up and journalists have accused Mr Murdoch of exerting pressure on editors and using his papers to promote his other business interests.