Members of the Bancroft family, which controls Dow Jones, have voted in sufficient numbers to approve Rupert Murdoch's $5 billion bid to buy their company and with it The Wall Street Journal, The Journal itself reported midday today. Bancroft family members that control at least 38 per cent of the special class of family-owned stock agreed to the deal, the report said.
That's the most clarity anyone has had since the Bancrofts began officially deliberating on the offer on July 23. Despite one branch's insistence on getting more money out of Mr. Murdoch's News Corp. and a family member's letter urging a sale, the picture remained uncertain well past last night's 5 pm deadline for a family vote.
An executive at Dow Jones Indexes confused things further this morning when he told a commodities panel in Chicago that he'd received an internal memo confirming the Bancrofts' acquiescence to the deal, according to a Reuters report. The executive, John Prestbo, could not be immediately reached, his spokeswoman declined to comment and a Dow Jones spokeswoman did not respond to a message.
But an insider at Indexes said there was no memo and that Prestbo had no more knowledge of the situation than anyone else. "He misspoke," the insider said.
A spokesman for the Bancroft family was quick to note to Ad Age that "the process of canvassing the Bancroft family members and trustees as to whether they wish to commit their respective shares to the proposed News Corporation transaction is still under way. Any suggestion that the process has been completed and/or that a particular level of support has been established is at this point premature."
If the 38 per cent is correct, however, it looks like Murdoch's greatest victory yet is at hand. The News Corp. board will meet this afternoon; Dow Jones board members have an evening session scheduled. They have previously agreed to proposed terms.
No doubt they'll sign off
The next step is getting public shareholders to sign off as well, but no one seems to doubt they will say yes to an offer worth $60 per share; those same shares closed at $34.63 on April 30, one day before news of the Murdoch bid became public.
Murdoch's unexpected progress in the past three months, including winning a crucial sit-down with the Bancrofts after they initially rebuffed his approaches, had given him all the momentum. And because public shareholders are expected to overwhelmingly approve the offer, Murdoch didn't even need a Bancroft majority to secure enough support to close a deal.
But last week's haggling and arguments among the Bancrofts began to make the outcome look iffy. The Bancrofts' Denver branch, which owns 9.1 per cent of the company's voting stock, began looking like a solid "no" vote after arguing, unsuccessfully, for more money, according a July 27 report in the Journal. Murdoch had previously suggested he wasn't interested in raising his bid. Now if Denver is in agreement, the Journal notes that that brings the percentage of stock owned by family voting in favor of the deal up to at least 38 per cent.
Deal looked uncertain
By midday yesterday, Murdoch's News Corp. was sounding dissatisfied. Asked whether the level of support that apparently existed at that point was enough for News Corp. to proceed with the deal, a spokesman said that was "highly unlikely." Dow Jones shares closed at $51.56 yesterday, before the outcome of the Bancrofts' deliberations became known.
There has been endless worrying, particularly among reporters both inside and outside the Journal and key family members, that Murdoch's hands-on approach to media ownership would degrade the quality and independence the paper now enjoys. But the sales side, which has suffered some recent reversals, turned out to be enthusiastic about the Murdoch bid.