Murdoch Says a Majority Isn’t Enough to Buy Dow Jones

Were they talking to me? I posted

a blog entry this morning saying that Rupert Murdoch would

surely go ahead with a Dow Jones acquisition even if he only got the current

level of support from the Bancroft family. Next thing you know, News Corp is

saying exactly

the opposite:

News Corp. Corp. is "highly unlikely" to proceed with its $5 billion

offer for Dow Jones & Co. if its bid doesn’t get more support from the

Bancroft family than has currently emerged, a News Corp. spokesman said.

As of late yesterday family members holding about 28% of Dow Jones’s overall

voting power had committed to support the deal, The Wall Street Journal reported

today. The spokesman says if that holds true, News Corp. likely wouldn’t take

the deal to a full Dow Jones shareholder vote.

News Corp. will likely need voting power representing at least 30% from the

Bancrofts to succeed, as the vast majority of the nonfamily shareholders are

expected to support the deal.

I’m hesitant to take News at its word, here, if only because the company has

every incentive to chivvy as many Bancrofts s possible into taking the deal.

It’s all well and good for N.E. Bancroft to vote against the deal in the certain

knowledge that it’ll go ahead and he’ll pocket the proceeds anyway – but

Rupert would really rather that didn’t happen.

I also don’t understand the rationale behind holding out for 30% rather than

the 28% that Murdoch already has. Why is the difference between those two figures

so important? Both of them, after all, would give Murdoch a small but seemingly

unassailable majority of the total votes.

Maybe the WSJ could try to explain where the 30% figure comes from?

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