Internet entrepreneur details Dow Jones proposal

By Kenneth Li and Robert MacMillan

NEW YORK (Reuters) - Internet entrepreneur Brad Greenspan outlined a new proposal on Friday to keep Dow Jones & Co Inc out of Rupert Murdoch's hands, saying his plan could help boost the stock price to above $100.

Urging shareholders to reject Murdoch's $5 billion takeover bid, Greenspan offered to lend members of the Bancroft family, which controls Dow Jones, $400 million to $600 million to buy out other Bancrofts who want to cash out at $60 per share -- the price Murdoch's News Corp has offered.

In exchange, Greenspan said he would get two board seats and the rights to all value created in the stock above $60 per share.

"It's an oddball proposal," said Ken Doctor, a media analyst at Outsell Inc. "It's very late in the game."

The plan comes days before a Bancroft family meeting on Monday in Boston to consider Murdoch's bid. The Bancrofts control the publisher of the Wall Street Journal newspaper by holding 64 percent of the company's voting stock.

"We are engaged with Bancroft shareholders," Greenspan said in a phone interview, in response to a question about whether some Bancroft shareholders were familiar with the plan. "The reason I wanted to put out a statement was that I felt I didn't get a chance to get out the financial data we put together."

Family members are expected to signal whether they support the deal on Monday, but the outcome is uncertain as an undetermined number of Bancrofts worry Murdoch would meddle with Dow Jones's news operations in an attempt to further his business interests.

Experts said the proposal by Greenspan, an early investor in MySpace, could gain traction among the Bancrofts.

"Having a financial alternative for those who are feeling price pressure to sell to someone they perhaps don't approve of is going to put a lot of pressure on the deal as a whole," said Gordon Kaiser, head of the corporate practice at law firm Sanders, Squires & Dempsey.

Newspaper analyst John Morton agreed, "assuming it's real and he's got the money to back it up."

Greenspan declined to name his financial backers, but said "I've got a group of investors. One of the things I'm focused on is introducing them to different Bancroft folks to get them comfortable."

He added, "The capital is not the issue."

"If what is left are Bancrofts who are either adamantly opposed to Murdoch or fairly opposed to him, it could be the end of this whole saga," he added.

Greenspan said his proposal triggered interest among several unidentified Bancrofts, according to the Wall Street Journal.

Greenspan's vehicle for the deal is Journal Investment Group, but it was unclear if he had partners. A spokesman for Greenspan's entity could not elaborate. Greenspan could not immediately be reached.