The Bancroft family will meet today to consider News Corp.'s $5 billion bid for the parent company of the Wall Street Journal. The gathering of the 30 family members — the first since the board of Dow Jones & Co. approved the deal Tuesday — is expected to take place at the Boston Hilton in the hometown of law firm Hemenway & Barnes, which manages most of the Bancroft holdings.
The family, which has run Dow Jones and its flagship newspaper for a century, controls 64% of the company's shareholder voting power. For the deal to be approved, less than one-third of the Bancroft family's vote is needed.
"It is going to be a close vote," a press analyst with the research firm Outsell Inc., Ken Doctor, said. "This is the decision of a lifetime for the family, and they have to consider not just the financial implications but how it will affect the Bancroft legacy."
News Corp.'s chairman, Rupert Murdoch, first proposed to acquire Dow Jones in a letter sent to the Bancroft family in mid-April. He offered $60 a share, or a 67% premium to Dow Jones's stock price before news of the offer became public. After topping off at nearly $62 a share on June 5, shares have fallen more than 10%, to $55, at the market's close on Friday.
The Bancrofts' ownership structure is complex, and today's meeting will entail far more than a simple head count. While some family members own shares in Dow Jones directly, the vast majority of shares are held in dozens of trust accounts. Typically, three trustees must vote unanimously to sell. Trustees include family members or the family's lawyers or bankers.
Key players who could sway the outcome of today's gathering include Michael Elefante, a trustee on several large accounts and a Dow Jones board member who voted in favor of the News Corp. bid. The Denver-based law firm Holme Roberts & Owen will also be critical: It oversees trusts with more than 9% of the overall voting power.
The Bancroft family could press for more time to conduct due diligence on other offers that are also on the table. These include a proposal by Internet entrepreneur Brad Greenspan to fund a buyout of shareholders and a recapitalization of the company. In an open letter to Dow Jones board members, Mr. Greenspan, the original owner of the popular social-networking site MySpace, outlined a plan that includes providing as much as $600 million to Bancroft family members who oppose the deal with News Corp. so they can buy out members of the family who want to sell. It is unclear how he is financing the proposal, which also includes making free the Wall Street Journal's subscription Web site and creating a financial TV news channel.
The supermarket magnate Ron Burkle is also interesting in investing in Dow Jones and has met with board members, although details of his proposals haven't been made public.
"There is not going to be another $5 billion offer made to buy Dow Jones, but that isn't what we are looking for," said Steven Yount, president of the IAPE Local 1096, the union that represents the company's employees. "Other options, from Greenspan or Burkle, for example, will bring in new strategic partners but still allow the Bancroft family to remain in control."