• 30 Jul 2007 at 2:33 PM
  • Bancroft

News Corp-Dow Jones Deal “Highly Unlikely”

NEWSCORPDOWJONESRUPERTMURDOCHWALLSTREETJOURNALSMALL.JPGRupert Murdoch’s bid for Dow Jones, once a sure thing, then “too close to call,” is now “highly unlikely” unless the Bancroft family increases its support of the deal by 5 p.m. today, the Wall Street Journal reports.
At the moment, 28% of Dow Jones’ voting power supports the deal, although it is unclear what percentage of Bancrofts voted affirmatively; 30% of the family needs to support Murdoch for his $5bn bid to go through. If this is not met, “News Corp likely wouldn’t take the deal to a full Dow Jones shareholder vote.”
After all the mud-slinging and Rupe’s cryptic commentary, this summer’s saga could come to a close tonight, in which case I will have no idea what to write about.
News Corp. Says It’s ‘Highly Unlikely’ To Buy Dow Jones at Current Count [Wall Street Journal]

  • 27 Jul 2007 at 4:11 PM
  • Bancroft

Colorado Bancrofts Say No To News Corp

NEWSCORPDOWJONESRUPERTMURDOCHWALLSTREETJOURNALSMALL.JPGTwo days after the contentious Bancroft family powwow in Boston, the Denver branch of the family announced it will vote against News Corp’s $5bn bid for Dow Jones, insisting that Rupert Murdoch raise his offer by $120-240mn. The Denver trust controls 9.1% of the Bancroft’s voting power, but has been watched closely by News Corp and Dow Jones management. “The outcome has been seen as too close to call, although the Denver trust’s decision increases doubts about the deal’s prospects,” The Wall Street Journal reports.
The Colorado Bancrofts want a 10-20% premium on compensation for super-voting B class shareholders (The Bancrofts) although News Corp spokespeople insist that the Murdoch will not raise the bid and that a two tiered compensation is not tenable.
Key Bancroft Family Trust to Vote Against News Corp. Bid for Dow Jones [Wall Street Journal]

  • 25 Jul 2007 at 2:17 PM
  • Bancroft

Bancrofts Fight It Out In Boston

NEWSCORPDOWJONESRUPERTMURDOCHWALLSTREETJOURNALSMALL.JPGA Bancroft wrangle over NewsCorp’s bid for Dow Jones ended in stalemate yesterday after emotional harangues from opposing factions, the Wall Street Journal reports. The meeting, in the Boston Hilton was so grueling that, “after four hours of discussion, family members were so hungry that they made do with a tray of stale danishes.”

Interviews with more than a dozen family members, outside advisers, lawyers and others involved in the process suggest that the outcome remains too close to call. What has seemed to many analysts like a logical move — accepting a $60-a-share bid for a company whose shares previously had been trading in the mid-30s — is still in question amid the deep emotions the bid has stirred. Participants said more doubts about a News Corp. deal were apparent at the end of the six-hour session than at the beginning.

On several occasions Bancrofts “held back tears” as they extolled the merits of an independent editorial board. One prominent Rupe resister, Jane Cox MacElree, seemed even to make the distressing “Daniel-Pearle-would-have-wanted-it-this-way” argument. Another opposing force claimed that the company was worth more than Murdoch’s offer of $60-a-share and that the family shouldn’t accept anything below $66.
Although only 30% of the Bancrofts’ voting power must endorse Murdoch’s proposal for it to go through, investors are becoming increasingly unsure that the deal is a sure thing, Dow stock is currently trading at $54.01, down from as high as $61.20 in June.
It looks like the interminable saga will continue for now, maybe even into August.
Relative Uncertainty [Wall Street Journal]

  • 23 Jul 2007 at 10:54 AM
  • Bancroft

The Bancroft Ownership Mystery

NEWSCORPDOWJONESRUPERTMURDOCHWALLSTREETJOURNALSMALL.JPGOff to a slow start here this morning because of the rain in New York City. We had to wait for our interwebs to dry out. (Just like Alphaville, the deal blog at Financial Times, which has reportedly had trouble due to the flooding in England. Unless that’s just Brit-speak for, uhm, one too many pints on Sunday night.)
But it’s back to business now. And by “business” we mean, of course, the saga of Rupert Murdoch, the Bancroft family and the Wall Street Journal.
One of the things we’re sure has been absolutely frustrating to anyone who has been following the endless tape of this story has been the complete lack of information about which members of the Bancroft family and its representatives control exactly which shares and which percentage of the votes. It was only at the middle of last week that we learned that Michael Elefante, the partner at the Boston law firm Hemenway & Barnes who is a trustee for two of the largest trusts holding shares for the family, can deliver a little less than half of the family’s 64% voting stake. Let’s call that 30% of the total voting power of the company.
Today the New York Times reports that the leader of the opposition to Murdoch within the family, Christopher Bancroft, controls around 14.5 percent of the total Dow Jones shareholder vote as of January. And his cousin, Jane Cox MacElree, is running around with 14.8 percent. (Apparently no-one else has more than 4.3%.) But you have to read a bit between the lines of the Times—too often the stuff we really want to know apparently isn’t “fit to print”—to understand why they spend so much time talking about Chris and so little talking about Jane. It’s because Jane isn’t really involved with the Dow Jones stuff, and leaves the decision making to Chris. So you can count her shares as shares controlled by Chris. That gives him around a little more than 30% of the voting power of the company, or about what Elephante controls. To that you can add the “Never Murdoch” shares controlled by the Ottaway family to come up with a 36% opposed number.
In short, going into today’s big Boston Bancroft powwow, Murdoch is a bit behind. Probably at least 36% of the voting power of Dow Jones opposes him. He’s got 30% on his side. But Murdoch has a secret weapon: the 30% or so of the voting power vesting in shares that were once held by the general public and are now held by stock arbitrageurs, the Bancrofts, the Ottaways and a few people who aren’t paying any attention. Most of those shares will vote his way. To play it safe, let’s put that pro-Murdoch number at around 25%.
Which gives Murdoch right around 55% of the voting power of the company. Since he only needs 51%, that means he wins. But it’s close. And since we’ve been guestimating at a few of the crucial numbers, it’s possible that it’s even closer than this. If the numbers are shifted a couple points in the only direction—say, Elefante only has around 28% of the vote in his pocket and only 22% votes held by common shareholders go for Murdoch, he’s down to a losing 50%.
Which leaves us at the exciting possibility that we may be entering the rare situation where a very few amount of votes—perhaps those held by a small shareholder who doesn’t even remember he has the shares in his account (or his attic)—could swing the voting. In short, the Bancrofts may be meeting in Boston in 2008. But the voting may well be in Florida, 2000 territory.
A Family Meets Today to Hear the Complexities of a Bid for Dow Jones [New York Times]
Bancrofts To Consider Murdoch Bid, ‘Close Vote’ Predicted [New York Sun]
Know Your Bancrofts [New York Magazine]

  • 20 Jul 2007 at 8:58 AM
  • Bancroft

Everyone Hates The Bancrofts

The sentiments of the commentariat have decisively turned against the family that controls Dow Jones, reports Rachel Sklar at the Huffington Post. Although the Bancroft family’s hesitation to sell to Rupert Murdoch’s News Corp is often dressed up as a concern for the editorial integrity of the Wall Street Journal, it’s also been described by a source familiar with the family’s thinking as a form of status anxiety. Controlling the company that owns the Wall Street journal has conveyed heightened prestige on the family, a prestige they are being asked to surrender in exchange for Murdoch coin (and probably some News Corp stock).
“Without the paper, they are simply another rich family from Boston,” the source explained.
Sklar’s reporting shows that the worst fears of a loss of prestige seem to becoming reality. Sklar quotes from various media commentators who more or less accuse the Bancrofts of selling out.
“The various deals to retain editorial control through promises and pledges, boards of graybeards and watchdog committees seem pathetic, really. It’s the roilings of a genteel poor family needing to sell its beloved estate to the parvenus* but not wanting to allow the unwashed to decorate their homestead… If you’re so outraged by Murdoch, then don’t sell,” Matt Cooper has written.
New York media maven Tina Brown says: “The fact is, they’re cashing out, and they should just get on with it if that’s what they’re going to do.”
Others seem even more dissatisfied with the Bancroft family, comparing it unfavorably with the Corleone family of the Godfather movies.
Tina Brown on the Bancroft Family: “Why Don’t They Just Cash Their Check And Shut Up” [Huffington Post]

Although a NewsCorp deal will likely may be announced this week, Ron Burkle and Brad Greenspan, two renegade investors no one takes seriously had a meeting with the Dow Jones board yesterday. The pair, who did not present an offer and have few, if any commitments from other investors, want to “buy out only those members of the Bancroft family who wanted to sell,” the New York Times Reports.
The primary Dow Jones union recruited Burkle, who owns the private equity firm Yucaipa Companies, to partner with Greenspan and block Rupert Murdoch’s bid in what seems to be another effort to protect the journal’s editorial independence. The New York Observer details the lunch between Greenspan and a union leader in which the plans were discussed.
“I think it’s clear the family does not want to sell to Rupert Murdoch. If they did, they would have taken the $5 billion a long time ago. We would much rather have the family continue its stewardship of this company. I believe that working with Burkle and a number of other people, we have alternatives, if the family wants an alternative,” union leader Steve Yount tells the Observer.
But does this make any sense? Does the addition of Burkle make Greenspan’s half-baked bid less crazy or twice as crazy? We would side with the latter, but don’t take our word for it. Take the word of the former chief executive of Dow Jones, Peter Kann, who the Journal describes as “outspoken in his support for the independence of Dow Jones”
“If the family is going to sell I see no point in pursuing industrial conglomerates, Internet entrepreneurs, supermarket magnates and real-estate developers. None know anything at all about journalism. As to Mr. Murdoch, at least he loves newspapers, presumably would invest in the WSJ and Dow Jones, and would seem to have little incentive to tarnish a trophy he has coveted for so long,” Kahn says in today’s Journal story on the item.
Also, see Gary Weiss for what happens when amateur investors buy newspapers. A serious question for Dow Jones employees who may be invited to join some sort of leveraged Employee Stock Ownership Plan rival buyout bid is whether they want to spend part of their paycheck buying the company from the bondholders for the next decade or so. Because that’s the best-case proposal from a Burkle-Greenspan partnership.
Shares of Dow Jones traded slightly lower today, bringing our technical arbitrage measurement down to 90%. But we’re exercising our own editorial independence here and refusing to move the meter. It remains unchanged at 95%.
Burkle and Greenspan Gather Journal Kiddies for ESOP Fable [New York Observer]
Dow Jones Hears Alternative Proposals [Wall Street Journal]
2 Investors Discuss Partial Purchase With Dow Jones Board [New York Times]

NEWSCORPDOWJONESRUPERTMURDOCHWALLSTREETJOURNALSMALL.JPGThe co-author of the fabricated tale from Friday about News Corp. having bought Dow Jones is sticking by his story. Andrew Neil, who wrote the article with James Forsyt, and is “credible” because (in light of?) he edited Murdoch’s Sunday Times of London for 11 years, took issue with the fact that Dow Jones representatives called him out for lying. His take? “[The protestations] are rubbish…They’re all swearing at us because, I assume, they’re all out in the Hamptons.” Mr. Neil, the Times reports, was drinking at the Ritz at the time.
Earlier: Rupert Murdoch Does Not Own Dow Jones…Yet!
Interminable Dow Jones Saga Possibly Over?
Expert on Murdoch Insisted the Dow Jones Deal Was Done [NYT]

  • 06 Jul 2007 at 9:32 AM
  • Bancroft

Interminable Dow Jones Saga Possibly Over?

NEWSCORPDOWJONESRUPERTMURDOCHWALLSTREETJOURNALSMALL.JPGIt’s only been reported in one British paper (so let’s remain skeptical, because those publications have a tendency to lie) but according to The Business Rupert Murdoch has “succeed with his $5 billion bid for Dow Jones.”
Allegedly, negotiations have been completed (less, “we want more money,” more “editorial independence, don’t make this the Post, you can only hire and fire the top editors and publishers, etc”), the board says the deal will be accepted by the Bancrofts over the next few days and a formal announcement is expected net week. News Corp will apparently pay $60/share, a 67% premium on the $36/share price in April.
Like we said, no one else has this story, though one of the writers, Andrew Neil, is a former “Murdoch lieutenant,” so perhaps that adds a miniscule amount of plausibility. According to CNBC’s David Faber no deal has been reached, despite news to the contrary from “some rag in a far away place.” Anyone else care to comment?
EXCLUSIVE: Rupert Murdoch buys Dow Jones, owners of the Wall Street Journal [The Business via Gawker]
‘Murdoch buys Dow Jones’ report [The Guardian]