Media baron Rupert Murdoch did not win the support of a solid majority of the family that controls the Wall Street Journal by a Monday deadline, casting doubt on the prospects for his $5-billion takeover bid.
More than five hours after the 2 p.m. EST deadline for members of the Bancroft family to tell their lawyers how they were voting, their Boston firm still hadn't issued a statement. Instead, the Journal reported the lawyers were still haggling with holdouts who were angling for a higher price than the $60 a share Murdoch's News Corp. offered in April for Journal parent Dow Jones & Co.
Doubts about a successful acquisition mounted through the day, especially after people involved in the process put the level of support from various Bancroft family trusts at about 28% of total voting power. All told, the family controls 64% of the power in Dow Jones through super-voting Class B shares.
A 28% tally should be enough to win eventual approval of the deal, because the 30% of the vote held by regular Class A investors is expected to back the Murdoch bid, which added a dramatic premium to the previous going rate for Dow Jones stock.
But a News Corp. spokesman said it was "highly unlikely" that Murdoch would proceed without more family support because small Class A investors often don't bother to vote in such referendums, leading to an expensive and nasty fight.
Several people involved in the struggle for Class B votes said they believed News Corp.'s comments were aimed at a few trustees that control more than 9% of voting power. Those lawyers had indicated in recent days they would vote against Murdoch because they wanted more money for the stock.
If the Bancroft holdouts can be convinced that Murdoch would sooner walk away than raise the bid, they might change their minds before a News Corp. board meeting scheduled for today, where directors are expected to discuss the next step.
The uncertainty put pressure on Dow Jones shares, which fell $2.89 Monday, or more than 5%, to close at $51.56.
Few were shocked that the Bancrofts had failed again to come together on a decision.
"I'd be very surprised if they behaved any differently from how they have all along -- confused and tardy," an advisor said to another party in the fray.
When Murdoch expressed interest in buying Dow Jones, the family immediately came out against a sale, just as its members had rejected all comers for more than a century.
