News Corp.’s Patience Prevails
In a long road to victory, Rupert Murdoch and his team at News Corp. have been waiting patiently through negotiations for this moment….well almost. With the finish line in sight, the Dow Jones & Co. have agreed to be acquired by News Corp. However, there is still one more important vote of approval needed. The vote of the Bancroft family.
The Bancroft family, which controls the majority of the company’s voting stock, has not been overly enthusiastic over the prospect of the News Corp. acquisition. Some family members have even gone as far as looking for other investors entirely.
The Journal’s web site has put out a statement that reports that representatives of the Dow Jones have accepted the $60-a-share bid, which puts the valuation of the company at $5 billion.
The agreement is anticipated to go to the board tonight for a final vote. There is speculation that the deal may put the pressure on the family to accept the offer as well.
Yet, the deal will not be so easily passed. Most of the family shares are held in dozens of family trusts. In the majority of cases, trusts can only be sold of its three trustees vote to do so.
The family’s demands for consideration of sale include a binding agreement that limits News Corp.’s control over content. However, there is no certainty reported that states the family has approved of the negotiations set forth by Murdoch.
The offer of $60-a-share is a premium over the $36-a-share the company had been trading at before the bid went public. Murdoch first made a bid for the company over a breakfast meeting in March and put the offer in writing to the board in April.
The Bancrofts, who own less than a quarter of Dow Jones share, have most of the supervoting rights. This gives them 64% of the voting power as of February according to their last public accounting of their holdings.
Reader Comments.
How much is enough? Rupert Murdoch and News Corp already exude more than enough control of the fragile US news media. If/when Murdoch gains of Dow Jones several outstanding US media products will no longer distribute independent news coverage. A sad day looms on the horizon for The Wall Street Journal.
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