Shares in Dow Jones fell on Monday to significantly below the $60-per-share offer from Rupert Murdoch’s News Corp amid uncertainty about whether enough members of the company’s controlling Bancroft family would back a sale.
Hemenway and Barnes, Boston-based trustees for the Bancroft family, told the family to submit their votes on the News Corp offer by 5pm Eastern Time on Monday, but it was unclear when the results would be announced.
The Bancroft family controls 64 per cent of Dow Jones’s voting shares and their backing is essential to determine whether News Corp succeeds in its $5bn cash bid for the owner of the Wall Street Journal.
A News Corp spokesman said on Monday that, based on reports that family members holding around 28 per cent of Dow Jones’s voting shares had indicated their support as of Sunday, it was “highly unlikely” Mr Murdoch would proceed unless there was a greater level of support.
News Corp did not specify how much further support it was looking for, but, based on calculations of the voting intentions of other Dow Jones shareholders, it was estimated that Bancroft family members holding at least 30 per cent of voting shares would have to back Mr Murdoch’s offer.
The chances of the deal going ahead have repeatedly been called “too close to call”.
Reflecting the uncertainty, shares in Dow Jones remained volatile on Monday and closed down 5.31 per cent at $51.56.
In recent letters and e-mails, some family members have made emotional arguments in favour of a sale, while others continue to oppose selling to Mr Murdoch, mainly due to his reputation for a hands-on editorial approach to his media properties, which include the New York Post, the Sun newspaper in the UK, and the Fox News Channel.
Other parts of the family want Mr Murdoch to raise his bid.
Michael Elefante, an attorney at Hemenway and Barnes and the family’s main trustee, backs a sale.
Mr Murdoch made a $60-per-share cash bid for Dow Jones to the Bancroft family privately in April, offering a 65 per cent premium to where the shares were trading.
The family rejected the offer on May 1, when details were leaked, but then reconsidered and agreed to initiate negotiations with Mr Murdoch.
Some non-family shareholders, such as Jim Ottoway, whose family controls about 7 per cent of Dow Jones’s voting shares, oppose a sale of the group to Mr Murdoch.
Most other outside investors are hedge funds or others institutional investors, which are expected to back a sale to News Corp.
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