The far-flung family that controls financial publisher Dow Jones & Co. is expected to decide within days whether it will relinquish its stake and let Rupert Murdoch’s News Corp. get the company for $5 billion.
Members of the Bancroft family, who trace their ownership of The Wall Street Journal’s publisher to 1902, assembled for six hours Monday in Boston to hash out whether to accept Murdoch’s offer. Participants indicated that the meeting — which included Dow Jones directors who favor accepting News Corp.’s bid — brought the family closer to a decision.
“The family had a very productive meeting and they now have all the information they need to make a good decision about the News Corp. offer,” said Michael Elefante, who serves as lead trustee for the family and is a Dow Jones board member.
Another Dow Jones director, Christopher Bancroft, said the gathering “helped everyone understand what’s being offered and what’s at stake.” Bancroft said he expected his relatives to decide how to vote their various stakes by the end of the week.
Bancroft, who has opposed Murdoch’s bid and has been seeking alternatives to it, said he had not changed his position.
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 be enough to scuttle the deal.
A family member who had been undecided about the sale to Murdoch said she was opposed, The Wall Street Journal said on its Web site Monday. Jane MacElree, a family trustee, votes shares totaling 15 percent of Dow Jones’ total shareholder power, the newspaper said.
Last week, Dow Jones directors tentatively approved the purchase by News Corp. though Bancroft representatives on the board abstained. If enough Bancrofts accept it, the proposal would go back to the boards of both companies for final approval.
In addition to price, the family is also weighing an agreement with News Corp. to set up a special committee that would have to approve any decisions to hire or fire top editors at The Wall Street Journal.
The Bancrofts — who initially rejected Murdoch’s offer out of hand in early May before changing course — sought those editorial assurances out of concern that Murdoch might bend the Journal’s news coverage to suit his corporate interests.
Murdoch says those concerns are unfounded, but still faces strong objections to his bid from several quarters, including a union representing Journal reporters and Jim Ottaway Jr., a former Dow Jones board member whose family controls 7 percent of the company’s voting power. Some Bancrofts have actively sought alternatives to his bid.
Bancroft said the family was still considering a proposal from Internet entrepreneur Brad Greenspan, who says he would help finance a buyout of family members who wanted to sell and then invest in improving Dow Jones’ Web video properties. But Bancroft acknowledged that Greenspan’s plan “can’t top” Murdoch’s financial terms of $60 per share. Dow Jones stock was trading in the $30 range before Murdoch’s deal was disclosed.
News Corp. is a huge media and entertainment conglomerate that owns Twentieth Century Fox, Fox News Channel, MySpace, and newspapers in Australia and the United Kingdom. Those papers include serious broadsheets such as The Times of London, but also some racy tabloids such as The Sun in England.
In addition to the Journal, Dow Jones publishes Barron’s, Dow Jones Newswires, MarketWatch.com and the Dow Jones stock market indicators.
No matter how the Bancrofts vote, Murdoch’s offer will have left a mark on the company’s governance.
One independent director, Dieter von Holtzbrinck, resigned in protest of the board’s decision to take News Corp.’s money. Another director, David Li, is ensnared in a federal insider-trading investigation of two Hong Kong residents who bought $15 million in Dow Jones stock before the News Corp. offer was disclosed. Li has denied wrongdoing.