By: E&P Staff
In the first public comments from a member of the family that controls Dow Jones & Co., Christopher Bancroft said he fears selling to Rupert Murdoch’s New Corp. would endanger The Wall Street Journal’s independence, the company’s flagship newspaper reported Thursday.
While representatives of the Bancroft family have long said that members representing 52% of the voting stock oppose Murdoch’s $5 billion offer, Christopher Bancroft’s public opposition is significant because, the Journal reported, he “has been regarded by some in the News Corp. camp as a potential swing vote who could steer the family in its favor.”
A Dow Jones director, Christopher Bancroft and his two siblings control about one-third of the Bancroft family’s 64% voting stake in the company.
But the article by Journal reporters Matthew Karnitschnig And Susan Warren reported that in an interview Christopher Bancroft he feels a strong emotional connection and personal responsibility for the paper and its staff. He said would not want to “pull the rug out” on the newsroom, and revealed he had replied to some 50 letter sent him by Journal reporters.
Murdoch’s $60-a-share offer represents a premium of some 67% on Dow Jones trading price before the bid became publicly known, but Bancroft appeared to be unimpressed by that.
“I’m open to any situation that benefits The Wall Street Journal and Dow Jones and its shareholders,” he said. “At the moment, I don’t see anything that would do that.”
Bancroft family members met privately in Boston Wednesday to discuss the offer, a meeting held “partly at the behest of one branch of the family, the Hills,” the Journal reported, citing “people familiar with the matter.”
The Journal reported “several key members of the family” skipped the meeting, including Christopher Bancroft and William Cox Jr. and his children, who control about 15% of the voting shares. The Journal reported Cox also opposes the Murdoch offer.
The Journal reported that the News Corp. offer is opening up long-standing differences inside the family, particularly generational ones. The paper reported that some family members “have complained that the family’s initial rejection of Mr. Murdoch’s offer was made over their heads.”
Hemenway & Barnes, the Boston law firm that oversees the family trusts of stock, polled only trustees of the trusts — who under terms of the trustee actually vote the stakes — plus family members with individual holdings of the Class B voting stock. It was not obligated to canvass the trust beneficiaries, and didn’t, the Journal reported.
The Journal also said unnamed “critics within the family” complain that trustees have not pushed to reduce the dividends — amounting in recent years to nearly all Dow Jones’ annual net income — that go primarily to older-generation Bancrofts, and do not provide an annual income for their children.
The Journal quotes an unnamed family member as saying Murdoch’s rich premium was “huge eye-opener” that has “forced people to look at reality.”