Bancroft Minority Can't Block a Dow Jones Sale

Back at the beginning of June, Floyd Norris mused about whether a minority of Bancrofts could block a sale of Dow Jones to Rupert Murdoch, and John Carney whipped out his Casio and calculated that "Bancrofts holding slightly less than 4.3 million Class B shares—or just 26% of the family’s total Class B holdings—could successfully resist a takeover by tender offer even we assume all the shares of common stock tendered into the acquisition".

Turns out, that's not going to happen.

The WSJ clarifies the situation this morning, saying that "only 51% of the voting power is required for approval" of the deal sealed by the Dow Jones board yesterday. What's more, Michael Elefante, the Dow Jones board member who voted in favor of the deal, "can deliver a little less than half of the family's 64% stake," according to the paper. It's theoretically possible, but in practice vanishingly unlikely, that Elefante qua Dow Jones board member would vote in favor of the deal, while Elefante qua family trustee would vote against.

All of which means that Christopher Bancroft, James Ottaway, and other important shareholders will be able to vote their shares against a deal without actually scuttling it. They'll sleep better at night, knowing that they did their utmost to prevent a sale to Murdoch, while also knowing that their bank accounts will be significantly fatter once the deal, against their objections, goes through.

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