The lead story on the home page of The Wall Street Journal this morning said it all:

NEWS CORP. MADE a $5 billion offer for Dow Jones, publisher of The Wall Street Journal . The bid, a roughly 67% premium, could spark others. Bancroft-family shares representing a slight majority of the voting power would oppose the deal.

Yes, Rupert’s at it again. His “friendly” unsolicited US$5 billion bid for the venerated Wall Street Journal has created pandemonium in the US media industry and revived all the admiration and antagonism that is generated every time Murdoch tries to pounce on an establishment icon.

But the controlling shareholders of Dow Jones, the Bancroft family, were quick to reject the offer. This is how the WSJ itself was reporting their response this morning:

Dow Jones & Company said that a director who is a representative of the Bancroft family, Michael B Elefante, has informed the Dow Jones Board of Directors that “members of the family and the trustees of trusts for their benefit have advised him that they will vote shares constituting slightly more than 50% of the outstanding voting power of Dow Jones as of April 30th excluding options against the proposal submitted by News Corporation to acquire all of the outstanding shares of Dow Jones common stock and Class B common stock for $60.00 per share.”

And the Murdoch bid has rocked many of the Journal’s staff. This statement from the Independent Association of Publishers’ Employees, which represents some Dow Jones employees, sums up that view:

The staff, from top to bottom, opposes a Rupert Murdoch takeover of Dow Jones & Co. Since the early part of the 20th century, the Bancroft family has stood up for the independence and quality of The Wall Street Journal and has built it into one of the world’s great newspapers.

Mr Murdoch has shown a willingness to crush quality and independence, and there is no reason to think he would handle Dow Jones or The Journal any differently. Despite our differences of opinion with current management, we strongly encourage the Bancrofts to continue to stand up for the institution’s independence, and to walk away from this offer.

Moreover, the massive premium Mr Murdoch is offering suggests only one recourse to make the acquisition profitable: gutting the enterprise and slashing the staff that make it the leading financial news organisation.

“This is the greatest newspaper in America, one of the greatest in the world. It has great journalists which deserve, I think, a much wider audience,” Murdoch told his own Fox News in an interview earlier today. “We feel that with coming both online and offline, there’s a great deal to be done here. It’s got great journalists, it’s got great management, but it’s got a rather confined capital. It’s got to be part of a bigger organisation to be taken further.”

Asked whether he expected private equity companies to outbid him, Murdoch was calm. “We are paying, offering a very, very high premium, which I don’t think they could reach. They need to leverage with a lot of interest-bearing notes, and this is already at about 50 times earnings.”

As for any concern about the offer by his own shareholders, he was even calmer. “Oh, I think they have faith in me. They’ve been very loyal to me for a long time. Our company is now worth, has a market cap of over $70 billion, I think. So, we have had our ups and downs. Often when I have made big moves, the shares have gone down a bit, only to go up a lot more later on.”

Why is  he doing it? Sentiment — or sensible business?

“What attracts Mr Murdoch is not only the Journal ‘s print business but its digital operations as well,” writes Stephanie Kang in the WSJ .

“This deal may be one of a kind,” says Fred Prouser of Reuters. “First, there is the perfect fit of the Journal and Dow Jones brands into the next big venture for Murdoch’s News Corp. Having built Fox News into a 24-hour cable news giant, Murdoch is moving into the business news sector, challenging CNBC. The content, expertise and reputation of the Dow Jones properties — including Barron’s and the various global Wall Street Journal editions — give him instant muscle for that fight.

“Beyond that, the Journal is not like other newspapers. About the only thing it has in common with your metro daily is the paper they’re printed on. Where most newspapers make their money by aggregating mass audiences to read grocery, automobile and classified ads, the Journal ‘s business is built on an elite audience that highly values the information the paper provides. This audience in turns attracts advertising for luxury goods and financial services unavailable to most other dailies. The evidence is growing that this is exactly the right place for a newspaper to be.”

Now the greatest business newspaper in the world is in play, and can use its editorial authority to write about its own fate. Should be a great yarn.