Dow Jones Deal Still a Shaky Prospect

While the board of directors at Dow Jones (DJ) has signaled that it's ready to accept News Corp.'s (NWS) buyout offer, some reported dissension from Bancroft representatives suggests that the family remains a big wild card in the deal.

The publisher of the Wall Street Journal announced late Tuesday that its board is "ready to approve" the $5 billion offer from News Corp., but the deal is not done until members of the Bancroft family, Dow Jones' controlling shareholders, pledge enough support to constitute a majority of its overall voting power.

Dow Jones spokesman Howard Hoffman declined to comment on the details of the board's vote and whether it was unanimous, but the Journal reported that two directors who are representatives of the Bancroft family, Christopher Bancroft and Leslie Hill, abstained from the vote, reflecting legal liabilities that prevented them from registering "no" votes.

The Journal also reported that Dieter von Holtzbrinck, the retired head of a German publishing empire that he inherited, abstained from the vote, and Dow Jones CEO Richard Zannino, Bancroft family trustee Michael B. Elefante and Bancroft family member Lisa Steele voted to recommend the offer.

Zannino, who was reportedly an initial contact for News Corp. Chairman and CEO Rupert Murdoch when he was mulling an offer, has previously declined to take a position on the bid.

Steven Davidoff, a professor with Wayne State University Law School, says that the lack of unanimity among directors in supporting the deal weakens the board's endorsement, but he says the support from a majority of directors bodes well for a deal getting done.

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