Dow Jones & Company and News Corporation Enter Into Definitive Merger
Agreement
Bancroft Family Members Holding Approximately 37% of Dow Jones' Voting Power
Agree to Support the Transaction
NEW YORK (Aug. 1, 2007) — Dow Jones & Company (NYSE: DJ) and News Corporation
(NYSE: NWS, NWS.A; ASX: NWS, NWSLV) announced today that they have signed a
definitive merger agreement under which News Corporation will acquire Dow
Jones in a transaction valued at approximately $5.6 billion.
Under the terms of the agreement, which was approved by both companies' boards
of directors, Dow Jones stockholders will be entitled to receive $60 in cash
for each share of common stock and Class B common stock that they own.
Certain members of the Bancroft family and the trustees of trusts for their
benefit who collectively own approximately 37% of Dow Jones' voting stock
have agreed to vote to approve the transaction. In addition, the parties
have agreed on the terms of an editorial agreement that provides for the
establishment of a five-member, special committee with the objective of
assuring the continued journalistic and editorial integrity and independence
of Dow Jones' publications and services. The initial members of the special
committee will be Louis Boccardi, Thomas Bray, Jennifer Dunn, Jack Fuller
and Nicholas Negroponte.
The merger agreement provides that up to 250 holders of record and not more
than 10% of the shares of Dow Jones may elect to have their shares of Dow
Jones equity converted into a number of Class B units of Newco LLC, a newly
formed subsidiary of News Corporation (each unit of which will be
exchangeable for one share of Class A common stock of News Corporation in
accordance with the terms and conditions of the Newco LLC operating
agreement). The number of Class B units of Newco LLC issuable in exchange
for each share of Dow Jones common stock will be based on the exchange ratio
in the merger agreement, which is equal to the number of shares of News
Corporation's Class A common stock with a value of $60 based on the volume
weighted average trading price of a share of Class A common stock of News
Corporation over the five trading days ending on the trading day prior to
the closing of the merger. The transaction is expected to be tax-free to Dow
Jones stockholders to the extent they receive Newco LLC Class B units for
their Dow Jones shares.
The parties have also agreed that, upon closing of the merger, News
Corporation will appoint a member of the Bancroft family or another mutually
acceptable person to the News Corporation board of directors.
Rupert Murdoch, Chairman and Chief Executive Officer of News Corporation,
said, "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."
Richard F. Zannino, Chief Executive Officer of Dow Jones, said, "News
Corporation's proposal reflects the vitality and uniqueness of Dow Jones and
its world-class journalism, brands, businesses and people. The transaction
will deliver significant returns to our shareholders. It will also build on
our recent, industry-leading earnings growth and make our company and
journalism even stronger as our strengths are leveraged across News
Corporation's powerful global distribution and marketing platforms for the
benefit of our readers and other customers. On behalf of all of my
colleagues at Dow Jones, I would like to express our deepest gratitude to
the Bancroft family for their years of steadfast support for the
journalistic excellence of Dow Jones. We look forward to continuing their
legacy."
M. Peter McPherson, Chairman of the Board of Dow Jones, said, "Having
thoroughly reviewed News Corporation's proposal, the Dow Jones Board has
overwhelmingly voted to approve the definitive merger agreement. This
decision has been difficult and emotional for a great many people because of
the long history of this great institution. The board has concluded, with a
great deal of family support, that the proposal provides outstanding
financial value and provides excellent opportunities to the extraordinary
Dow Jones franchise. Also, we wish to thank the Bancroft family for their
years of faithful stewardship. The editorial independence agreement proposed
by the Bancroft family is a strong agreement about which all can be
pleased."
Mr. Murdoch added, "Dow Jones is a vibrant company and one of the world's
greatest media franchises, with a portfolio of brands that has no equal in
financial information and business journalism. In combination with News
Corporation's assets, The Wall Street Journal and the other Dow Jones
operations will be even more formidable competitors as we profitably extend
their invaluable information across our print, broadcast and digital
platforms around the world."
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.
Goldman, Sachs & Co. served as financial advisor to Dow Jones, and Fried,
Frank, Harris, Shriver & Jacobson LLP provided legal counsel to Dow Jones.
Simpson Thacher & Bartlett LLP provided legal counsel to the non-family
members of Dow Jones' board of directors. Merrill Lynch & Co. acted as
financial advisor to certain trusts for the benefit of the Bancroft family.
Wachtell Lipton Rosen & Katz provided legal counsel to the Bancroft family.
JPMorgan, Allen & Company and Centerview Partners served as financial
advisors to News Corporation, and Skadden, Arps, Slate, Meagher & Flom LLP
and Hogan & Hartson LLP provided legal counsel to News Corporation.
This press release and the related Agreement and Plan of Merger will be filed
with the U.S. Securities and Exchange Commission pursuant to the
requirements of U.S. securities laws.
Source:
dowjones.com
