Bancrofts Meet to Discuss Murdoch Bid for Dow Jones

Members of the Bancroft family, which controls Dow Jones & Co., may decide by the end of the week whether to accept a $5 billion offer by Rupert Murdoch's News Corp. for the publisher of The Wall Street Journal.

Family members met in Boston on Monday to hear presentations by their advisers on the deal, but have not decided if they will agree to the sale.

Winning over the family, which controls 64% of Dow Jones's voting shares, is a major hurdle for Murdoch's offer to buy Dow Jones, which has been under Bancroft control for more than a century.

Their decision is far from certain as an undetermined number of Bancrofts oppose the deal, fearing Murdoch would interfere with Dow Jones's news operations to further his business interests.

One prominent shareholder and board member, Christopher Bancroft, is seeking alternatives to Murdoch and could block the bid. Bancroft, speaking to reporters, said that he expects the family to decide by Friday whether it will recommend selling the company.

"We're still undecided," said Bancroft, wearing a suit and a baseball cap with the words "Bite me" on it. "Everyone has to decide for himself."

The Wall Street Journal reports that Jane MacElree, a family trustee who votes shares totaling about 15% of Dow Jones's total shareholder power, made it clear to the family she was in the
anti-Murdoch camp, people familiar said. MacElree, a member of the Cox branch, is one of the most senior Bancrofts and has been viewed as a swing vote. Her decision could put her at odds with some of her seven children, who support the deal.

Dow Jones Chairman Peter McPherson declined to comment.

The family's lead trustee, Hemenway & Barnes lawyer Michael Elefante, who is also a Dow Jones board member, called the meeting productive. The Bancrofts, he said, "now have all the information they need to make a good decision on the News Corp. offer."

The Bancrofts were expected to receive the offer and ask questions at the meeting. They could take time -- perhaps days -- to consider how they would vote their shares, according to a source familiar with the situation, who asked not to be named.

Elefante planned to canvass the Bancrofts after the meeting to determine how they would vote before offering the tally to the boards of directors of Dow Jones and News Corp.

The family's opposition has cast doubt on what many analysts thought would be a sure thing given Murdoch's offer of $60 per share -- a 65% premium to where the stock had traded before the offer was disclosed in May.

"The difference between what the stock was worth before Murdoch approached them and now is so broad," said Tom Rosenstiel, director of the Project for Excellence in Journalism, an organization that follows events in U.S. journalism. "[But] families are peculiar. And you're talking about more than money here. You're talking about blood and a family identity."

Also in the mix is a competing proposal by Internet entrepreneur Brad Greenspan. On Friday, Greenspan offered to lend the Bancrofts $400 million to $600 million to buy out other members of the family who want to cash out at $60 a share.

In exchange, Greenspan would get two board seats and the rights to all value created in the stock above $60 per share. Under his scenario, Dow Jones would take on $2.5 billion in debt to buy back 50% of its outstanding shares at $60 per share and take on another $500 million in debt to fund a digital expansion.

The deal likely would not work because of the debt load, said Benchmark Co. analyst Ed Atorino. "Why would Dow Jones take on that much debt to basically bail out the Bancrofts? It would wipe out most of their earnings. A company with no earnings, no dividend, a huge amount of debt -- it doesn't make sense," Atorino said.

In a letter to Dow Jones shareholders on Friday, Greenspan talked about creating a cable and satellite financial news channel to rival CNBC and News Corp's planned Fox business channel and a new online video venture.

Dow Jones shares closed down 31 cents at $54.69 on the New York Stock Exchange on Monday. News Corp's Class A shares rose a penny to close at $22.72.