Dow Jones Slips Ahead of Meeting

The Bancrofts and Rupert Murdoch are set to discuss <I>The Journal</I>'s editorial independence.
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Updated from 1:02 p.m. EDT

Shares of

Dow Jones

(DJ)

fell 1% Monday as representatives from the company's controlling family, the Bancrofts, were reportedly set to meet with Rupert Murdoch and his son to iron out concerns about a

News Corp.

(NWS) - Get Report

takeover of the publisher.

While the Bancrofts, whose ancestors built Dow Jones into a leading publisher of financial news, appear to be capitulating to News Corp.'s $60-a-share offer to buy the company, there are signs that the two parties might have trouble finding common ground on setting up safeguards to ensure the editorial independence of Dow Jones' flagship property,

The Wall Street Journal

.

The Bancrofts initially expressed opposition to a sale to Murdoch's News Corp., whose media properties have a reputation for not upholding the journalistic standards upon which Dow Jones prides itself. But last Thursday, cracks appeared in that opposition, as the family expressed a willingness to discuss News Corp.'s offer as well as offers from any other buyers.

Shares of Dow Jones reached a 52-week high of $61.49 Friday as investors bet that a new buyer could emerge -- but one hasn't yet. As well, Murdoch has signaled that he won't be sweetening his bid. The stock recently was down 80 cents to $60.40.

As members of the Bancroft family meet with Murdoch and his son, James Murdoch, the parties will discuss the family's concerns about preserving the traditions of their flagship newspaper.

The Journal

reported Sunday that News Corp. officials say the company is willing to go further than it has ever gone before in establishing independent controls at the newspaper to ensure its independence from Murdoch's business interests and political views. That said, Murdoch may not be willing to allow the Bancrofts to control an editorial-oversight board that he proposed creating in the event of a deal.

In addition to establishing such a board, News Corp. has offered to bring a representative from the Bancroft family onto its board of directors if a deal is consummated.

If control over an editorial board at

The Journal

is a key demand from the Bancrofts, Murdoch's position may be a sticking point in the negotiations. Still, his recent breakthrough in getting the Bancrofts to consider his offer and meet with him is clear evidence that his proposal has momentum.

With the newspaper industry in tatters and Dow Jones Newswires threatened by

Thomson's

(TOC)

recently announced acquisition of

Reuters PLC

(RTRSY)

, the Bancrofts find themselves backed into a corner by Murdoch's offer, which represents an extraordinary 67% premium to where shares of Dow Jones were trading before it became public knowledge.

Separately, the Independent Association of Publishers' Employees, which represents 2,000 Dow Jones workers, said Monday that it has hired advisers to help it explore alternatives to the News Corp. deal.

The union, which has already expressed sharp opposition to a sale of Dow Jones to News Corp., said it has already reached out to a number of "substantial investors."

"IAPE believes that the best safeguard to the independence and integrity of Dow Jones would be the continued stewardship of the Bancroft family, but if the family is persuaded that a sale of Dow Jones is necessary, IAPE believes that there are alternatives to

Rupert Murdoch," the union said in a statement. "We are hopeful that the Bancroft family, with its long-standing commitment to the integrity of Dow Jones, will consider these alternatives."

Both Dow Jones and News Corp. could not be immediately reached for comment.