Deal Worries Dent Dow Jones - TheStreet

Deal Worries Dent Dow Jones

Shares slide on a report that News Corp. won't proceed with the bid with the current level of support.
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Updated from 11:19 a.m. EDT

Members of the Bancroft family face a 5 p.m. EDT deadline on Monday to reach a decision on whether to sell

Dow Jones

(DJ)

to Rupert Murdoch's

News Corp.

(NWS) - Get Report

, according to

The Wall Street Journal

.

If the family members, the controlling shareholders of Dow Jones, fail to emerge with more support, News Corp. would be "highly unlikely" to proceed with the bid, the

Journal

reported Monday afternoon.

The news left investors even more hesitant about the prospects of a deal. Dow Jones shares recently were sliding $2.82, or 5.2%, to $51.63 -- well below News Corp.'s $60-a-share offering price.

That offer, valued at $5 billion, came at a 67% premium to where the publisher's stock was trading when the offer bid public in May.

Since then, the far-flung members of the Bancroft family have been debating whether to sell the newspaper publisher and take the cash or hold on to it and risk a steep selloff in the stock. Currently, the family is divided, according to media reports, and it's unclear whether there is enough support to do a deal.

The

Journal

, citing a person close to Dow Jones' board of directors, reported that as of late Sunday, nearly 28% of the family-controlled votes favored the deal, while News Corp. needs 30% to assure a comfortable margin. The lead trustee for the family, Michael Elefante, has set the Monday deadline to receive voting agreements on the sale, the

Journal

said.

The

Journal

, citing a News Corp. spokesman, said Murdoch likely won't proceed with the deal at the current level of support.

Roy Winnick, a spokesman for the Bancroft family, declined to comment on the status of the talks. Dow Jones spokeswoman Linda Dunbar also had no comment. A News Corp. representative could not immediately be reached.

A majority of Dow Jones' directors recently voted in favor accepting News Corp.'s offer, but two Bancroft family members who hold seats on the board, Christopher Bancroft and Leslie Hill, reportedly abstained from voting in a move that amounted to a "no" vote.

Also, Dieter von Holtzbrinck, a Dow Jones director who is the heir of a German publishing empire, resigned his seat in protest of the deal, citing concerns about News Corp.'s editorial practices, standards and independence.