Murdoch Left to Woo Bancrofts; Dow Jones Doesn't Act

May 3 (Bloomberg) -- Dow Jones & Co.'s refusal to act on News Corp.'s $5 billion takeover bid leaves Rupert Murdoch with the task of convincing members of the company's controlling Bancroft family to sell.

``This throws the ball back to Murdoch,'' said Ed Atorino, a New York-based analyst with Benchmark Co. ``Murdoch will probably raise his bid and deal with the family.''

Dow Jones, owner of the Wall Street Journal, said yesterday its board won't act on News Corp.'s offer because the Bancroft family opposes the bid. Family members who control 52 percent of the voting power are against the bid, New York-based Dow Jones said yesterday in a statement.

``The board didn't say no,'' Atorino said. ``They said raise your bid and convince 2 percent of the family to go your way.'' Atorino rates the shares ``hold'' and doesn't own them. The Bancroft family members with 52 percent of voting power are a ``small majority,'' he said.

Michael B. Elefante, a director who represents the Bancrofts, informed the board about their decision. Murdoch told Fox News on May 1 that he plans to meet with family members in coming weeks to discuss his $60-a-share offer.

Dow Jones shares rose 30 cents to $56.30 at 9:40 a.m. in New York Stock Exchange composite trading. They surged 55 percent on May 1, when the bid was made public. Class A shares of New York- based News Corp., owner of Fox News, Fox Television and Twentieth Century Fox, rose 11 cents to $21.70.

News Corp.'s offer for Dow Jones, which also owns Barron's and Dow Jones Newswires, was 65 percent above the previous day's closing stock price. Bancroft family members who control more than 50 percent of the voting power rejected the offer shortly after it became public.

Voting Power

The Bancrofts hold about 64 percent of the voting power at Dow Jones through Class A and Class B shares, while owning about 25 percent of the company. The family has controlled the newspaper since 1902.

News Corp.'s bid values the Bancroft stake at about $1.23 billion. Christopher Bancroft and cousins Elizabeth Steele and Leslie Hill, a retired airline pilot, are on the board.

The Bancrofts may approach Thomson Corp., Reuters Plc and Yahoo! Inc. to gauge their interest in buying the family's stake, The Business reported on its Web site.

Murdoch's offer represents about 17 times Dow Jones's projected 2007 profit, based on estimates by Prudential Equity Group analyst Steven Barlow in New York. Newspapers have been selling at 10 times to 11 times earnings, Barlow said. Sam Zell's proposed acquisition of Chicago-based Tribune Co. was at 10 times projected 2007 earnings.

Bloomberg News parent Bloomberg LP competes with Dow Jones in providing financial news and information.

`Greatest Newspaper'

Murdoch has long coveted Dow Jones, whose Wall Street Journal is the second-biggest selling newspaper in the U.S. behind Gannett Co.'s USA Today. Murdoch this week described the Journal as ``the greatest newspaper in America.''

Dow Jones's business media assets would dovetail with News Corp.'s Fox Business News channel, which is scheduled to start broadcasting later this year. News Corp. also publishes 170 newspapers including The Times of London and the New York Post.