Media mogul and owner of News Corporation Rupert Murdoch has come a step closer to clinching ownership of the Wall Street Journal's publisher, Dow Jones, after key members of the controlling Bancroft family switched sides to back his $5 billion takeover bid.

Frantic last-minute negotiations on Tuesday finally ended the prolonged two-month takeover battle in which senior Bancroft members had initially shown reluctance to sell the company to Murdoch.

As per the agreement released in a statement by both companies on Wednesday, the certain members of the Bancrofts - the family which collectively control 64 percent of Dow Jones - would pledge at least 37 percent of the company's voting stock to Murdoch's News Corp. - a move that would help the 76-year-old media mogul add the venerable Wall Street Journal to his ever expanding media empire.

With minority public shareholders likely to overwhelmingly back the $60-a-share bid from Murdoch (a meeting of all shareholders will be convened in either September or October to vote on the deal), the Bancrofts' position has left him in a winning position. According to media reports, the Dow Jones board of directors meeting in New York gave its approval to News Corporation's deal after the latter's board also meeting in the city had approved the deal.

According to some reports, a series of minor concessions were sufficient to swing the votes of a crucial Denver-based Bancroft family trust which had held out for a higher price. News Corporation has reportedly agreed to foot part of the bill for $30 million in advisory fees run up by the Bancrofts as they decided the fate of the company. The companies said in a statement that one member of the family or a mutually acceptable person would be given a seat on News Corporation's board and some. CNBC said some members of the family would get tax-free preferred stock in lieu of cash.

A critical move by Murdoch in July - assuring the creation of an independent board to oversee the editorial integrity of the Journal and other Dow Jones operations - is seen as an element key to securing the Bancrofts' approval.

Under the terms of the July agreement, News Corporation will have the ability to hire and fire the top editors and publishers (a matter on which Murdoch would not budge); but a nominally independent five-person committee will have the power to approve or veto on these decisions.

Murdoch and Dow Jones will jointly agree on the membership of this panel, which will have the power to choose its successors - a crucial concession to the Bancrofts who are sensitive to the claim that they are sacrificing the Journal's editorial integrity by selling to Murdoch. The Bancrofts have received extensive legal advice in an attempt to satisfy themselves about the durability of the editorial safeguards.

But many see the Dow independent panel as only a fig leaf to facilitate the sale and that over time Murdoch would get around it.

Not everyone is happy with the deal and many continue to feel that the buyout will compromise the Journal's editorial integrity.

Steve Yount, president of Dow Jones' staff union, the Independent Association of Publishing Employees, said he was disappointed by the Denver trust's switch but heartened that some Bancrofts continued to oppose the deal. Yount had been critical of the ownership move

We hope their courage, and their commitment to news-gathering independence, will impress upon Dow Jones' new owners that the success of our products has always been based on a foundation of integrity and trust, Yount said.

German publishing executive Dieter von Holtzbrinck resigned as a director of Dow Jones two weeks ago after the board tentatively signed off on the deal, saying he was worried about how the Journal would fare under Murdoch.

Former managing editor of the Wall Street Journal, Norman Pearlstine told Bloomberg the move had been a “great shock.”

If you've spent your whole life in journalism at the Wall Street Journal this is a great shock, said Norman Pearlstine, a former Wall Street Journal managing editor who is now a managing director at Washington-based buyout firm Carlyle Group. If you're looking at the ways companies come and go, 100 years is a great run but lots of traditions come to an end.

Some of the trustees bailed, fearing they'd get sued by some of the younger trust beneficiaries if they voted against the deal - so much for principles, summed up Ed Atorino, media analyst at Benchmark & Co. After all the high-minded concerns about editorial interest and journalistic excellence, it gets down to who pays the legal fees for the Bancrofts.

Efforts to block the deal were led by Christopher Bancroft, an investment banker and director, and his cousin Leslie Hill, also a director, but neither were able to come up with credible alternative bidders at Murdoch's price. The supermarket magnate Ron Burkle and the internet entrepreneur and MySpace founder Brad Greenspan expressed interest but failed to make concrete proposals. General Electric, owner of the business channel CNBC, and Pearson, owner of The Financial Times, explored a joint bid but could not justify the price.

Leslie Hill, reportedly quit on Tuesday as a Dow Jones director as the final deal took shape.

According to analysis on the Journal's website, the only shares so far cast definitively against the offer are the 7 percent held by the family of James Ottaway, who sold a chain of local papers to Dow Jones in 1970. Ottaway's son Jim last month spoke out against Murdoch's Australian-British style of media ownership which, he said, involved expressing personal, political and business biases through newspapers and television channels.

It's a bad thing for Dow Jones and American journalism that the Bancroft family could not resist Rupert Murdoch's generous offer, said former Dow Jones board member and executive Jim Ottaway Jr., whose family controls 7 percent of Dow Jones voting shares.

It's a sad thing that the 105-year family tradition of protecting Dow Jones's independence as a public trust will end, he said in a statement reacting to the news of the deal.

However, the move taken by the Bancroft family to sell their stake to Murdoch is not unexpected.

The Bancrofts are among a group of centenarian newspaper families that includes the Sulzberger clan, who run The New York Times, and the Chandlers, who cashed out of Tribune earlier this year.

But unlike their peers, the Bancrofts refrained from interfering with the Journal's news operations. And, that remoteness amid sweeping changes in the way people get their news due to the Internet led to criticism that the family was neglecting the company.

Last week, Bancroft descendant Crawford Hill, urged fellow family members to vote for a sale.

We are actually now paying the price for our passivity over the past 25 years, Hill wrote in a letter to his relatives. Our real legacy was an inherited lack of awareness as to what it takes to nurture and pass on an effective legacy about what is really required to be responsible, engaged and active owners of a family business.

Earlier, the Journal's managing editor Marcus Brauchli also gave cautious support to an agreement between News Corporation and Dow Jones backing an independent committee to safeguard editorial independence, paving the way for the Bancrofts to approve the sale.

The Bancroft family owns 25 percent of Dow Jones but controls 64 percent of the shareholder vote through a special class of shares that have 10 votes each. Opposition from a significant portion of the three-dozen adults in the family- descended from the family of Clarence W. Barron, who bought control of the company 105 years ago, would have been enough to scuttle the deal.

Though the family's hands-off approach insulated the Wall Street Journal from outside influence, yet, the company also made strategic blunders, such as the 1990 purchase of Telerate, a financial data provider, for $1.6 billion. Dow Jones later sold Telerate in 1998 for $510 million.

Nonetheless, the Journal, second to USA Today in circulation, continues to command respect - it has won 33 Pulitzer Prizes, fourth behind the New York Times, Washington Post and Los Angeles Times.

Among other things, the Dow Jones deal will help Murdoch get his hands on a company that employs 7400 people and runs Wall Street Journal; Wall Street Journal Online; Wall Street Journal Europe; Wall Street Journal Asia; Wall Street Journal Radio Network; Barron's weekly finance magazine; online finance news MarketWatch; monthly business magazine published in Hong Kong, Far Eastern Economic Review; Dow Jones newswires and data operation compiling DJ US stock index, Dow Jones Indexes.

Murdoch's News Corporation, founded from a pair of newspapers in Australia, is already one of the biggest media conglomerates on the planet. The company's portfolio includes: 175 different newspapers including the Times and The Sun in Britain, the Australian in Australia and the New York Post in the United States; book publisher HarperCollin; Fox Interactive (which includes MySpace, IGN, Rotten Tomatoes, AskMen,,; TV Guide; The Weekly Standard; leading UK television network Sky TV; DirectTV; 20th Century Fox; Fox News; FX (cable network), and the National Geographic Channel.

The deal comes as newspapers across the country face a deepening crisis of slumping revenues as readers flock to the Internet for information and entertainment, and advertising dollars chase them there.

The deal for Dow Jones represents the third time in just over a year that a major newspaper publisher has been pushed into a sale. Last year, Knight Ridder Inc. was forced to sell itself following shareholder pressure, and this year Tribune Co agreed to a going-private transaction orchestrated by the real estate magnate Sam Zell.

In May, the Reuters Founders Share Company has approved the £8.8 billion ($17.6 billion) takeover offer from Canadian publisher Thomson Corporation - a deal that would create the world's biggest financial news and data group, the companies said.

Thomson, Reuters and Bloomberg LP compete in what is known as the terminal market, the data terminals on desks at the world's major banks and brokerages. Reuters was the market leader for many years, though it has steadily lost ground to Bloomberg.

The Dow Jones deal will bolster News Corporation's planned financial news channel and help lure advertisers from Fairfield, Connecticut- based General Electric Co.'s CNBC, said John Morton, an independent newspaper analyst in Silver Spring, Maryland.

Dow Jones and CNBC compete with Bloomberg LP in providing financial news and information. Fox Business Network, scheduled to start in October, will compete with Bloomberg. Experts believe Murdoch will also use Dow Jones' network of Asian bureau to shore up its media operation in China.

Murdoch sees business journalism as a premium product for which readers will continue to pay a fee, in an era when mainstream newspapers migrate to free-of-charge access on the internet.