Bancroft member moves to block sale of Dow Jones: source

NEW YORK (Reuters) - Christopher Bancroft, a member of the family that controls Dow Jones & Co Inc DJ.N, is trying to block a takeover by Rupert Murdoch's News Corp NWSa.N, a source familiar with the situation said on Monday.

Bancroft has approached hedge funds and private equity firms, hoping to buy enough voting shares of Dow Jones to allow him to thwart a sale, the Wall Street Journal reported on its Web site, citing people familiar with the matter.

Bancroft is trying to buy more "supervoting" shares from other Bancroft heirs who may be ready to sell their stakes, but share his distaste for handing the family legacy to Murdoch, the Journal said.

News Corp, owner of Fox News, the New York Post and a sprawling global media empire, has offered $5 billion, or $60 a share, for Dow Jones, the publisher of the Wall Street Journal.

Bancroft, his two siblings, his niece and their children are beneficiaries of trusts that control about one-third of the Bancroft's stake in Dow Jones.

The family controls 64 percent of Dow Jones's voting power.

Some Dow Jones reporters and editors, as well as various members of the Bancroft family, oppose the News Corp bid because they think Murdoch would interfere with the company's news operations to benefit his business interests.

Bancroft's attempt to block Murdoch was "well worth exploring," but it and alternate proposals likely would not succeed, said Jim Ottaway Jr., a former board member and executive who also opposes Murdoch's bid.

"There are people who have offered various employee stock ownership plan ideas, but that means a huge amount of debt," said Ottaway, whose family controls 6.2 percent of the voting shares of Dow Jones. "I don't see a practical alternative right now."

Due diligence between News Corp and Dow Jones is winding down and people close to both sides say the process is "basically finished," the Journal reported, although it said a substantive discussion of price has not happened.

That could change on Monday when Murdoch and Dow Jones Chief Executive Richard Zannino sit down for lunch to discuss price and other terms, the Journal reported. Murdoch has not shown any interest in raising his bid, the paper added.

The Financial Times also reported that News Corp will meet Dow Jones directors this week, adding that the meeting will include News Corp representatives and a special group of Dow Jones directors and is expected to focus on price and other outstanding issues.

As News Corp's bid represents a 65 percent premium to Dow Jones's trading price before it disclosed the offer in May, some legal experts have said shareholders might sue Dow Jones or the board if an agreement fell through because of Bancroft's efforts.

But Columbia Law School professor Jeffrey Gordon said there may be no legal recourse for ordinary shareholders.

"I don't think as a legal matter they could object. They knew how the stock worked going in," he said.

The union that represents many Dow Jones employees is trying to drum up interest among other bidders, but is not working with Christopher Bancroft, said Christopher Mackin, president of Ownership Associates, which is advising the employee union.