Burkle explores Dow Jones offer
Los Angeles billionaire Ron Burkle and Internet entrepreneur Brad Greenspan on Tuesday proposed working with Dow Jones & Co. on a deal that would leave the company’s controlling shareholder, the Bancroft family, in charge of the publisher of the Wall Street Journal -- and provide them with new money to invest, according to people familiar with the plan.
The two men, who allied in recent days to present an alternative to a $5-billion takeover of Dow Jones by Rupert Murdoch’s News Corp., outlined their plans in a New York meeting with a group of five Dow Jones directors.
The pair offered a number of possibilities that centered on the company borrowing money to buy back about half of its outstanding stock, said the people close to the matter, who were not authorized to speak on the record because the talks are confidential.
The two men proposed using an employee stock ownership plan or bringing in potential strategic allies such as EchoStar Communications Corp., the satellite television company, these people said.
Greenspan and Burkle left the meeting hoping to get guidance within days on which proposal the board would be most interested in exploring.
“The key question is whether they are willing to do a partial deal,” said one person working on the proposal.
Burkle, who made a fortune buying and selling supermarket companies, was brought into the process by the union representing reporters at the Journal and other Dow Jones publications. Greenspan, who ran the company that created MySpace before its sale to News Corp., emerged independently and proposed a modest investment and stock buyback.
“This is about sitting down and saying there is some real money on the table, let’s explore the possibilities,” said union President Steve Yount.
The plan could allow some members of the Bancroft family to cash out and others to maintain control of the newspaper they inherited. “If the Bancroft family wants to remain stewards of Dow Jones, then that is available,” Yount said.
An EchoStar spokeswoman didn’t return a phone call.
The union is attempting to capitalize on the unease that some of the 35 adult Bancrofts feel about selling to Murdoch the leading U.S. business publication, which trails only USA Today in daily circulation. Former employees have repeatedly accused Murdoch of using the news content in his papers to promote his business agenda and conservative political views.
The five-member Dow Jones committee has agreed with News Corp. on most of a plan designed to keep Murdoch at arm’s length from the Journal’s newsroom, but many reporters and editors remain skeptical.
Dow Jones and News Corp. are reviewing Dow Jones’ operations and financial performance, and they plan to hammer out a full takeover deal that would be presented to the Bancrofts.
In the meantime, family members led by Dow Jones Director Leslie Hill have pushed the committee to entertain competing ideas. Burkle and Greenspan didn’t return phone calls Tuesday, and Dow Jones and the Bancrofts declined to comment.
Dow Jones shares fell $1.20 to $57.69, and further away from Murdoch’s offer of $60 a share.
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