Murdoch-Dow Jones: A Done Deal, Surely

It's Bancroft Decision Day today, and the press is still full of stories saying that the vote is "too close to call," or words to that effect. Obviously, every vote counts, it could go either way, this is like a rerun of Florida 2000... right?

It turns out, not so much. The WSJ gives the game away today:

As of late last night, nearly 28% of the votes favored the deal, according to a person close to Dow Jones's board. Common shareholders representing 29% of the overall voting shares are expected to vote for the deal in overwhelming numbers, thereby ensuring a majority. News Corp. needs 30% to assure a comfortable margin. It is unclear whether News Corp. would proceed with less than that.

Murdoch needs more than 50% of the votes in order to make this deal happen. He has 29% of the votes already, in the form of arbitrageurs and other holders of common stock, who are all ecstatic that their DJ shares might fetch $60 apiece. So, simple subtraction would lead us to the conclusion that he needs another 21% of the votes in order to reach the 50% hurdle. Since he already seems to have family members representing 28% of the votes in the bag, he's long since passed that point. (For those of you mathematically challenged on a Monday morning, 29% + 28% = 57%.)

Does anybody really believe that Murdoch wouldn't go ahead with this deal with a mere 57% of the votes? That the difference between 57% and 59% is crucially important to its success? I don't buy it. I do understand that a few holders of common shares can be forgetful; that many unexpected things can go wrong; that what the WSJ calls "a comfortable margin" is a very nice thing to have.

But I don't believe it's a dealbreaker.

My feeling is that Murdoch is going to go ahead with his Dow Jones acquisition no matter what, since he has substantially more than 50% of the vote behind him. Obviously, it doesn't behoove him to say so right now: he wants as many votes as he can get out of the Bancrofts. But there's no way, after coming all this way, that he'll let the absence of a "comfortable margin" derail the acquisition of a lifetime.

Add Your Comment

Report Abuse

Archive

Categories

Links