News Corp. presses Dow family to sell
Media magnate Rupert Murdoch, inserting himself into the 11th-hour deliberations of the family that controls Dow Jones & Co., sent the company's stock price tumbling 5.3 percent yesterday by casting doubt on whether his $5 billion takeover bid will go forward.
Shares of Dow Jones, owner of The Wall Street Journal, slid $2.89 to $51.56 on the New York Stock Exchange after a spokesman for Murdoch's News Corp. said it was "highly unlikely" to proceed with the acquisition unless the approval level of the Bancroft family increases. The shares were down as much as 9 percent at one point yesterday.
Lawyers and advisers for dozens of Bancroft family members, a farflung clan with Boston roots, wound up days of canvassing the family's response to News Corp.'s $60-a-share offer. A 5 p.m. deadline passed for the Bancroft votes to be delivered to the family's Boston law firm, Hemenway & Barnes. It was unclear late last night whether the family approved the buyout or when the outcome would be disclosed. Bancroft family members, who together control 64 percent of Dow Jones voting power, are descendants of the wife of Clarence W. Barron, a Boston journalist who bought Dow Jones in 1902.
The family members were strongly divided at a closed-door gathering at the Boston Hilton last week, according to participants, and the Journal reported yesterday that family shares totaling only about 28 percent of Dow Jones stock had signaled their support for a deal.
While the majority of nonfamily shares are presumed to back the takeover, which represents a premium of more than 65 percent over the value of Dow Jones shares on May 1, the day of the offer, News Corp. spokesman Andrew Butcher yesterday said a deal "would be highly unlikely at the present level" of Bancroft family support. He declined to say what percentage of family share approval would be required for the News Corp.-Dow Jones merger to proceed.
Representatives of Dow Jones and the Bancroft family declined to comment on the News Corp. statement.
Independent observers suggested it was a veiled threat by Murdoch in an effort to step up pressure on the Bancroft family.
"It's a riverboat gambler kind of tactic," said Ken Doctor, media analyst for Outsell Inc., a San Jose, Calif., market research firm. "He's trying to get the deal done, and he's trying to get it done at $60 a share. And he realizes that complexity is the enemy of this deal."
Doctor noted that, even as some Bancroft family members have opposed the buyout because they object to the sensationalized journalism of some of Murdoch's media holdings, others have been holding back their support because they want a sweetened offer.
"This is just in-tight negotiations as we reach the endgame," said Louis Ureneck, chairman of the journalism department at Boston University. "I think all Rupert Murdoch wants is one vote that gives him the majority. I don't think it's consequential to him whether he wins by one vote or scores of votes. The important thing for him is to prevail."
Robert Weisman can be reached at weisman@globe.com. 
