Sunday, June 3, 2007

Divide And Conquer: Bancrofts In Disarray

Mark Coultan has been reading the WSJ and the NYT, so you and I don't have to:
The New York Times reported that many younger family members had not been consulted after the initial offer, and that some still don't know how the 52 per cent figure was calculated.

The newspaper said that in discussions since then, they had voiced their feelings about what they saw as a family tradition of treating adults in the younger generation like children.

There was also resentment of the older generations getting most of the income from the family's holdings. Others believe Dow Jones has withered because it has paid out too much of its profits in dividends, and failed to invest in growth, something of which Mr Murdoch could never be accused.

The change in the family's position came about partly through a change of heart by two influential members.

According to The Wall Street Journal (which has the most thorough coverage in the US of its own future), Leslie Hill, a Dow Jones director and a former airline pilot, had confided to family members and others that she did not feel comfortable with her initial rebuttal of Mr Murdoch's offer.

The Journal also reported another family member, Elizabeth Steele, who is also on the Dow Jones board, as saying her branch of the family had concluded it lacked the "appetite for risk" to have Dow Jones continue as a stand-alone corporation in such a competitive environment.

In addition to this, the family lawyer, Michael Elefante, had also come to the conclusion that they should consider Mr Murdoch's offer.

The confusion and vision within the family is personified by Christopher Bancroft, who last Thursday signed off on a statement by the family saying they would consider meeting Mr Murdoch, only to say hours later, at a Dow Jones board meeting, that he did not realise that by agreeing to consider all options, he was effectively putting the company up for sale.

The New York Times reported he had told the board meeting: "All I said is that we'd meet with him." The Wall Street Journal reported him asking: "Is it too late for us to withdraw our statement?" However, the statement had already been posted on The Wall Street Journal's website, ironically.

According to the Journal, "a person close to the family" expressed displeasure with the board's statement, saying it went beyond what the family had hoped. 'We were not asking the board to put the company on the block."

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