German publishing executive Dieter von Holtzbrinck has resigned as a director of Dow Jones to protest the board's endorsement of a deal to sell the company, which publishes The Wall Street Journal, to Rupert Murdoch's News Corp.
In a letter to Dow Jones' other board members, von Holtzbrinck said he was "very worried" that the company's "unique journalistic values will long-term strongly suffer after the proposed sale." Dow Jones disclosed von Holtzbrinck's departure and included a copy of his letter in a regulatory filing Thursday.
Dow Jones' board endorsed the $5 billion buyout offer from News Corp. late Tuesday, and the proposal has now gone to the company's controlling shareholders, the Bancroft family, for a decision. They are expected to meet Monday and take several days to consider the offer.
Von Holtzbrinck was reported to have abstained from the board's vote Tuesday, as did Leslie Hill, a Bancroft family member who also serves as a director. Christopher Bancroft, another family member and director, was reported to have left the meeting early.
Murdoch's bid to acquire Dow Jones has met with stiff resistance in several quarters, including a union representing Journal reporters, several members of the Bancroft family, and former board member Jim Ottaway Jr., who together with his brother David control 7% of the company's shareholder vote.
The union and Ottaway have said they fear that Murdoch will bend the Journal's news coverage to suit his corporate interests. In hopes of preventing such an outcome, the Bancroft family insisted upon, and received, a commitment from News Corp. to establish a committee whose approval would be needed to hire or fire top editors at the newspaper.
"I cannot prove that my worries are right," von Holtzbrinck said in his letter. "I can only refer to News Corp. business practices in the past, can only refer to Jim Ottaway's article in the Journal, etc. I do not believe that the 'Special Committee' can finally prevent Murdoch from doing what he wants to do, from acting his way."
Murdoch has said that concerns about editorial interference are unjustified. He says he plans to invest in the Journal, including its Washington coverage, online operations and presence overseas.
Peter McPherson, the chairman of Dow Jones' board, said in a statement that the board accepted von Holtzbrinck's resignation "with regret" and that its members "wish him well." Von Holtzbrinck had served as a director since 2001.
Von Holtzbrinck is a former chairman of the supervisory board of Verlagsgruppe Georg von Holtzbrinck, a major German publishing company that produces books and newspapers. It owns a majority stake in the leading German business daily Handelsblatt.
News Corp. is a major global media conglomerate that owns Twentieth Century Fox, the Fox News Channel, MySpace, the New York Post and newspapers in Australia and the U.K., including The Sun and The Times of London.
The departure of von Holtzbrinck leaves the Dow Jones board with 15 members, including three members of the Bancroft family and the lead trustee of the Bancroft family's interests, Michael Elefante.
A Dow Jones spokeswoman declined to comment on von Holtzbrinck's departure beyond providing the brief statement from McPherson, and declined to say when or how von Holtzbrinck might be replaced.
The Bancroft family has been deeply divided over selling to Murdoch, and it is unclear how they will vote. Since many of the non-Bancroft votes are likely to approve Murdoch's rich offer, except for the block controlled by the Ottaways, Murdoch would only need roughly half of the Bancroft clan to support his bid in order for it to succeed.
Murdoch's bid of $60 per share represents a premium of about 65% over the mid-$30s price that Dow Jones shares were trading at before his proposal became public in early May.
The Bancrofts, who are descended from the family of Dow Jones correspondent Clarence Barron, an early owner of the company, own just under 25% of the company but control 64% of its shareholder vote through a special class of shares that carry 10 votes each, versus one vote for common shares.