Dow Jones and News Corp come to terms

Late yesterday, a special committee of the board of Dow Jones (NYSE: DJ) reached an agreement (subscription required) with News Corp (NYSE: NWS) for Rupert Murdoch's company to buy the financial publisher for $5 billion.

The deal will now go to the entire Dow Jones board for a vote today. It is almost certain to be approved. The last step will be the approval of the Bancroft family, which is still in question.

Murdoch has played his hand almost perfectly. The Bancrofts wanted to at least get him to sweeten his bid. But, as other offers fell short, he found that unnecessary. The 67% premium that he offered was too steep a price for other bidders. It may be years before it is known whether Murdoch paid too much for Dow Jones or whether he was able to pull out enough new revenue to make the amazingly high price work.

On the other side of the negotiations, Dow Jones editors and employees are understandably nervous. Murdoch could easily begin to cut back distribution of the newspaper and move more of its readership to the internet, which would cost hundreds of jobs in the production part of the company.

At the point, it would appear that Dow Jones will not be public at the end of the year.

Douglas A. McIntyre is a partner at 24/7 Wall St.