New York – In the coming days the future of The Wall Street Journal will be determined by a fractious, sprawling family descended from an early owner of Dow Jones & Co.
The Bancroft family – many of whom aren’t even named Bancroft – have been deeply divided over whether to accept a $5 billion takeover offer from media baron Rupert Murdoch. But with Dow Jones’ board now in favor of a deal, the pressure is on them to make up their minds quickly.
The next step in the process comes on Monday, when family members are expected to meet to hear a full briefing on the general deal terms that Dow Jones’ board signed off on late Tuesday. Then they’ll take several days to think it over.
If enough of them commit to the deal to satisfy News Corp., then the outcome is largely assured, with several other procedural steps left to take including final approval by the boards of both companies and a shareholder vote at Dow Jones.
All along, the hardest factor to predict has been the Bancrofts.
They initially rebuffed Murdoch’s approach in early May, only to reverse themselves later. They insisted on and received a commitment from News Corp. to create a committee with the power to approve or deny changes in the top editorial positions at the paper.
And even after all that, serious rifts among their ranks remained. Two key family members who are also board members continued to seek alternatives to Murdoch in the final stages of the process.
One of them, Christopher Bancroft, has said he opposes selling to Murdoch. The Journal reported late Tuesday that he left a board meeting that evening where a decision was eventually made to support the deal.
The Bancrofts collectively control about 64 percent of Dow Jones’ shareholder vote, even though they only own about 25 percent of the company, thanks to a special class of shares that have ten votes each versus one vote for every common share.
With most of the non-Bancroft shares likely to approve Murdoch’s offer of $60 per share – which represents a rich premium of 65 percent over the stock price when the offer became public – Murdoch only needs roughly half of the Bancroft family bloc to side with him to win Dow Jones.
A notable exception among the non-Bancroft shareholders is former board member Jim Ottaway Jr., whose father founded a group of community newspapers that Dow Jones acquired in 1970.
Ottaway said in an interview that he and his brother David, who together control about 7 percent of Dow Jones’ vote, would vote against the Murdoch deal.
“If the Bancroft family decides to sell Dow Jones, it should find a better buyer and a better home for one of the great journalistic institutions of our society,” Ottaway said.
