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Outfoxed: News Corp. Nabs Dow Jones

In another testament to his tenacity, Rupert Murdoch managed to sway the family with a controlling interest in Dow Jones & Company and add The Wall Street Journal to his media empire after a three-month courtship.

News Corporation  will pay $60 a share cash for common stock and Class B common stock to the Bancroft family and the trustees of trusts, who collectively own approximately 37 percent of Dow Jones' voting stock.

In addition, the parties have agreed on the terms for the creation of a five-member, special committee to preserve the editorial integrity and independence of Dow Jones' publications and services.

Also, upon closing of the merger, News Corporation will appoint a member of the Bancroft family or another mutually acceptable person to the board of directors of News Corp.

Unfortunately, that wasn't enough for one Dow Jones board member, Leslie Hill, who resigned in protest over the acquisition after an unsuccessful effort to prevent the acquisition.

"Regrettably, my inability to any longer protect what this brand has stood for means I herewith resign from the Board of Dow Jones," Hill said in her letter.

In an attempt to quell fears, WSJ publisher L. Gordon Crovitz printed a letter assuring readers things would not change under Murdoch.

"Readers can rely on this: The same standards of accuracy, fairness and authority will apply to this publication, regardless of ownership," he said, in part.

Murdoch said in a statement "I am deeply gratified at the level of support we have received from the Bancroft family and its trustees. Given the Bancrofts' long and distinguished history as custodians of Dow Jones, we appreciate how difficult this decision was for some family members. I want to offer the Bancrofts my thanks, and an assurance that our company and my family will be equally strong custodians."

In acquiring Dow Jones, Murdoch would add not only the most prestigious financial newspaper in the country to his considerable media empire, he also gets a major wire service, Dow Jones Newswires, that publishes 12,000 news items every day.

WSJ.com, the online arm of the newspaper, has 800,000 paying subscribers. Among the major components of News Corp.'s online efforts are MySpace, the social networking site, and IGN, the entertainment portal. Most recently, it acquired Photobucket.

The merger, which is expected to close in the fourth calendar quarter, is subject to approval by Dow Jones stockholders, execution and delivery by the parties of the editorial agreement, regulatory approvals and other customary closing conditions.

If the deal fails to go through, Dow Jones will pay News Corp. a $165 million fee, according to a filing by the two companies. In addition, if the deal is voted down by shareholders, Dow Jones will reimburse News Corp.'s expenses, up to $25 million, the filing said.

The road ahead could be a rocky one as FCC Commissioner Michael Copps expressed his doubts about the merger almost as soon as it was announced.

"We should immediately conduct a careful factual and legal analysis of the transaction to determine how it implicates specific FCC rules and our overarching statutory obligation to protect the public interest," he said in a statement.

"I hope nobody views this as a slam-dunk," he concluded.