After pressing for a higher price, most of the Denver faction of the Bancroft family has blinked and accepted the 60 bucks per share offer for Dow Jones & Company from Rupert Murdoch and News Corporation, according to the website of the Wall Street Journal, the marquee property of Dow Jones. That change of heart gives Murdoch support from more than half of the Bancroft voting block and virtually assures shareholder acceptance of the five billion bucks buyout. The Bancrofts, who have controlled Dow Jones for the past 100 years, hold 64% voting control. News Corporation had indicated that it would not go forward with support with Bancroft backing that totaled only 28% of the total votes, which was apparently the tally by Monday’s deadline. But that deadline proved flexible as the so-called “Denver Trusts” dropped their demand that a premium price be paid for the super-voting Class B shares and agreed to support the buyout with at least two-thirds of their votes, raising the level of support to at least 38% – with nearly unanimous support expected from the public holders of Class A shares, who own the majority of the company equity but only 29% of the voting power. Part of what persuaded the Denver faction to come into the fold was a move by the Dow Jones board of directors to assume the fees owed to the Bancroft family’s financial and legal advisors, said to total around 30 million bucks, effectively moving those costs to the buyer, News Corporation.
TVBR observation: Not an unreasonable compromise, but it is just incredible that the bargaining finally came down to 30 million, which is pocket change for a five billion bucks deal. So, the price moves from 5.00 billion to 5.03 billion and the deal is done. The Denver Trusts are only the third largest block of Bancroft family shares, so it looks like their brinksmanship – which nearly scuttled the five billion bucks buyout – has saved them about four million bucks.