The board of directors at Dow Jones & Co. has given its OK to a five billion bucks buyout by News Corporation. Now the Bancroft family, with their 65% voting stake, will have their say. But if the family is split, Rupert Murdoch could still succeed in buying Dow Jones and the Wall Street Journal.
Unlike many companies where members of the founding family (OK, the Bancrofts aren't the founding family, but they have been in charge for 100 years) have a voting trust agreement, the various factions of the Bancroft family are free to vote their Class B shares, with 10 votes each, as they wish. So, there won't necessarily be a solid 65% block voting yea or nay via the super-voting Class B shares.
According to the Wall Street Journal, Michael Elefante, who represents some of the Bancroft trusts, and Bancroft family member Lisa Steele, were among the Dow Jones directors who voted for the sale to News Corporation, as did company CEO Richard Zannino. Bancroft family member Leslie Hill and Dieter von Holtzbrinck abstained, while Christopher Bancroft left the meeting before the vote. That made the vote 13 yes, two abstentions and one absent. Christopher Bancroft has been actively seeking alternatives to the News Corporation bid.
SmartMedia observation: News Corporation and representatives of the Bancrofts have drawn up a voting agreement which would pledge all Bancroft-owned shares to be voted for the sale to News Corporation. If that isn't accepted by the family, it will then become a numbers game to get to 51%. If about half of the shares held by the various Bancroft factions are voted in favor of the deal, that's about a third of the total votes. It would then take overwhelming approval by the remaining shareholders – and a heavy vote turnout – to get to that 51%. That is possible, but it would be much easier for Rupert Murdoch to pull this off if he can get the backing of the entire Bancroft clan. The Bancrofts will assemble today for a presentation of the offer, but no decision is expected until next week.