Dow Jones, News Corp. deal remains iffy

The Baltimore Sun

News Corp. appeared tantalizingly close to winning the support of enough members of the Bancroft family to succeed in its bid to acquire Dow Jones & Co., but not close enough to conclusively predict victory.

Family members and trusts representing more than 30 percent of the shareholder vote, enough to put the deal over the top, indicated to their lawyers that they would support the bid, but some of them had not delivered signed commitments and could back away, according to people briefed on the matter, who were granted anonymity because they were not authorized to discuss it.

News Corp. has not said how many firmly committed votes it needs from the family before it will be confident enough in the outcome to proceed; people involved in the negotiations put the minimum figure at 30 percent to 34 percent of the overall shareholder vote.

The Ottaway family, longtime junior partners in Dow Jones, publisher of The Wall Street Journal, hold 7 percent of the shareholder vote and are opposed to the deal, and the Bancrofts, with 64 percent, were deeply divided, with a set of alliances that continued shifting until the last day.

That leaves 29 percent of the vote in outside hands, the great majority of which is expected to favor the deal.

But it is hard to predict what fraction will vote against, and how many shareholders simply will not vote, making it equally hard to be certain how many Bancroft shares News Corp. needs.

The byzantine takeover fight, which has dragged on for three months, took several more unorthodox turns yesterday.

Last night, well after the 5 p.m. Eastern time deadline for the Bancroft votes to be delivered to their Boston law firm, Hemenway & Barnes, there was no firm answer from one set of family trusts.

Those trusts are controlled by another set of the family's lawyers, based in Denver, who were seeking a higher price for the super-voting Class B shares, owned primarily by the Bancrofts, than for common shares. Dow Jones management has firmly opposed such a premium.

Another complication emerged yesterday as those Denver Trusts sought to have Dow Jones pay their fees and expenses for advisers and lawyers, which could run into the millions of dollars, according to people in involved in the talks.

Complicating the situation further was the revelation that Merrill Lynch, which had been representing the family on behalf of the Boston-based branch, had struck a deal for Dow Jones to pay its expenses, while advisers to other parts of the family had no such arrangement.

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