Dow Jones still all in the family

Deadline passes as Bancrofts debate Murdoch offer

The wheeling, dealing and posing to clinch a potential sale of Dow Jones & Co. to Rupert Murdoch's News Corp. went into after-hours Monday as members of the Bancroft family that controls the financial news and information company continued to hold off on their approval.

By press time, the status of voting support for the deal wasn't clear, and neither Dow Jones and the Bancrofts, nor News Corp., had commented on it.

However, News Corp. was expected to comment on whether it feels comfortable going ahead with its $60-per-share offer or pulling it off the table after an afternoon board meeting today.

Observers suggested that some in the Bancroft family were genuinely opposed to a sale, while others seemed to simply be holding out for a higher price, even though Murdoch has said several times that the $5 billion takeover proposal was his final offer. On Friday, one branch of the clan said it opposed a sale at the price offered (HR 7/30).

The deal proposed by News Corp. and made public May 1 has been heatedly debated within the Bancroft family and on Wall Street.

Michael Elefante, the Bancroft family's lead trustee and a Dow Jones board member, had set a Monday 5 p.m. EDT deadline for family members to get to him voting agreements to sell to News Corp.

However, the deadline arrived without any updates or comments from either side. One source confirmed a Monday night report on the Web site of Dow Jones flagship the Wall Street Journal saying that some Bancroft advisers and Dow Jones board members scrambled even after the deadline to assemble enough votes in favor of the deal.

The Bancrofts control 64% of the voting power of Dow Jones via a complicated web of trusts. Observers have said that family members representing at least 30% of the overall shareholder vote have to support the News Corp. deal to make the sale happen with a comfortable margin.

The Journal reported Monday morning that Elefante had counted as of the end of the weekend about 28% support from family representatives. That would mean that Bancroft family members holding 36% of the voting power would be against the deal in addition to the Ottaway family, with about 7%, that came out against the deal early on.

If holders of all or a big majority of the remaining 29% in Dow Jones that are controlled by nonfamily shareholders are for the News Corp. deal, Murdoch would clinch it in a shareholder vote that would take place in the fall as long as they do vote for it. Abstaining votes would not get counted here, though. So, it appeared that the media mogul was looking for stronger family support to ensure votes from nearly all the other shareholders, with some suggesting that he could sell it as a big success if he got about half of the Bancroft vote.

As a result, News Corp. turned up the pressure on the Bancroft family Monday, with a spokesman saying it was "highly unlikely" to go ahead with its offer if members don't pledge more than 28% of the overall shareholder vote in his support. He didn't specify how much support would be considered enough.

This led to renewed investor concerns that a sale might not come together, and Dow Jones shares closed down 5.3% on Monday at $51.56, well below their 52-week high of $61.76 set after the News Corp. bid became known.