Tag Archives: Barron’s

Bancroft representative in the limelight

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Peter Lattman of The Wall Street Journal profiles Boston lawyer Michael Elefante, who represents the Bancroft family, which controls 64 percent of the voting stock of Dow Jones & Co., the parent of The Wall Street Journal. Elefante has been the voice of a majority of the family in turning down the $5 billion offer from News Corp. to acquire Dow Jones.

Michael ElefanteLattman wrote, “Described by colleagues as dignified and reserved, Mr. Elefante is the Bancroft family’s most powerful representative. He serves as trustee for a large Bancroft family trust and has served as a Dow Jones board member since 2005. He succeeded Roy Hammer, also a lawyer at Hemenway & Barnes, who retired from the Dow Jones board after serving as a director since 1998.

“The Bancrofts, a disparate group spread out across the country, aren’t all represented by Hemenway & Barnes. Lynn Hendrix, a partner at law firm Holme Roberts & Owen LLP in Denver, serves as trustee for at least one of the Bancroft family trusts, according to a Dow Jones filing with the Securities and Exchange Commission.

“Mr. Elefante joined Hemenway & Barnes in 1970 and became a partner in 1976. He served as managing partner of the firm from 1993 to 1999. He graduated from Syracuse University in 1965 and Harvard Law School in 1969, where he was an editor of the Harvard Law Review.”

Read more here.

Dow Jones board to take no action on News Corp. offer

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The Dow Jones & Co. board issued a statement late Wednesday stating that it would not take any action regarding News Corp.’s $5 billion offer to purchase the owner of The Wall Street Journal, Barron’s and Marketwatch.

The statement said, “Dow Jones & Company (NYSE:DJ) today announced that a director who is a representative of the Bancroft family, Michael B. Elefante, informed the DowMichael Elefante Jones Board of Directors today that members of the family and the trustees of trusts for their benefit have advised him that they would vote shares constituting approximately 52% of the outstanding voting power of Dow Jones as of May 1st (excluding options) against the proposal submitted by News Corporation to acquire Dow Jones.

“Approval of a merger under Delaware law requires approval of a majority of the outstanding voting power of the corporation. Accordingly, the Dow Jones Board of Directors has determined to take no action with respect to the proposal.”

The statement can be read here.

Dow Jones board meets with bankers to assess options

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The Financial Times is reporting Wednesday that the board of Dow Jones & Co. met with bankers from Goldman Sachs to assess their options in the wake of the $5 billion offer from News Corp. for the owner of The Wall Street Journal, Barron’s and Marketwatch.

Goldman SachsJames Politi, Aline van Duyn and Josh Chaffin wrote, “Goldman Sachs, which is advising Dow Jones, was expected to give the full board an update on the News Corp bid.

“Goldman bankers were also expected to focus on an assessment of whether other media groups or private equity investors would come forward with a rival bid.

“People close to Mr Murdoch said he had not heard back from the Bancrofts on Wednesday about his requests for a meeting in the next two to three weeks.”

Read more here.

Former WSJ reporter: Rupert's not getting my shares

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Roy Harris, a senior editor at CFO magazine, writes on its blog that News Corp. CEO Rupert Murdoch won’t get any of the shares in Dow Jones & Co. that he owns from working as a journalist at The Wall Street Journal.

Roy HarrisHarris wrote, “I had to work for my 800 shares — 23 years as a Wall Street Journal scribe, diligently saving through the stock purchase plan, with its 15 percent discount.

“Like the Bancrofts and most other WSJ readers, I have, well, concerns about the quality of Journal coverage were it in the hands of the press baron who runs Fox News and the New York Post. And the Bancrofts and I must balance those concerns against the hefty premium that $60 represents.

“Then there’s the possibility that a less objectionable pair of deep pockets can be found. Or is there? In 36 years of reporting on business, I don’t think I’ve ever seen more divergent opinions on that question.”

Read more here. Harris, once deputy chief of the Journal’s Los Angeles bureau, said that he considered owning Dow Jones shares a “donation to good journalism.”

Details of Murdoch's letter to Dow Jones board emerge

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Wall Street Journal reporters Dennis Berman and Sarah Ellison had details Wednesday of the letter that News Corp. CEO Rupert Murdoch sent to the Dow Jones & Co. board about his plans for the owner of The Journal, Barron’s and Marketwatch should his $5 billion offer be accepted.

Rupert MurdochBerman and Ellison wrote, “The vision he laid out in the letter was one in which Dow Jones’s content would feed News Corp.’s nascent TV business channel, while also pumping through the rest of its extensive media properties around the globe. The letter made no mention of cost cuts and suggested that News Corp. was prepared to put significant capital into the company.

“Financial news, Mr. Murdoch wrote, was the fastest growing segment of ‘an otherwise languishing publishing industry.’ He noted that he understood ‘the challenges of transitioning into a digital future,’ while saying he wanted to extend Dow Jones’s print and online businesses across the U.S. and abroad. Combining the two companies would provide ‘a digital platform upon which Dow Jones’ management and employees can build,’ he said.

“Of particular note, Mr. Murdoch’s letter said he was prepared to structure a deal in a number of different ways. They could include the issuing of Class A News Corp. shares; a new class of convertible shares in News Corp.; or potentially another security that would be issued on a tax-free basis that would pay out an attractive dividend. Mr. Murdoch said his company’s board had endorsed the offer ‘enthusiastically.’ He offered to set up safeguards to ensure the Journal’s editorial independence through, for instance, creation of a separate board.”

Read more here. Their story states that the Dow Jones board will make a decision on the offer at its Friday meeting.

Who owns WSJ matters to journalists, but not Wall Street

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Allan Sloan writes in Wednesday’s Washington Post that journalists care about who owns The Wall Street Journal, but most people on Wall Street probably don’t.

Allan SloanSloan, Newsweek’s Wall Street editor, wrote, “There’s a real difference between journalistic giants and stock market pygmies. That’s the lesson of Monday’s $5 billion hostile offer by Rupert Murdoch’s News Corp. for Dow Jones, owner of the nation’s leading business newspaper, the Wall Street Journal.

“To most of us, of course, $5 billion is real money. But not to Wall Street. In a world in which you’ve got individual hedge fund managers and private-equity players knocking down more than $1 billion a year, a deal of this size wouldn’t rate much more than a yawn if the Wall Street Journal weren’t involved.”

And he concluded, “To those of us in journalism — and, I hope, to society as a whole — it really matters who owns journalistic trophies like the Wall Street Journal and the New York Times. But in the stock market, our business is insignificant. That’s a humbling thought, and not a particularly pleasant one.”

Read more here.

Dow Jones shareholders expect auction of company

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Leon Lazaroff and Cecile Daurat of Bloomberg News write that News Corp.’s $5 billion offer to acquire Dow Jones & Co., the parent of The Wall Street Journal, Barron’s and Marketwatch, will spur an auction of the company, according to some of its shareholders.

They wrote, “‘We’re in the first inning,’ said Lawrence J. Haverty Jr., associate portfolio manager at Gamco Investors Inc. in Rye, New York. Gamco had 825,000 Dow Jones shares as of December. ‘Dow Jones is a fish in the pond, and there are sharks swimming around.’

“Murdoch’s News Corp. yesterday offered $60 a share for Dow Jones, owner of the Wall Street Journal, Barron’s and Dow Jones Newswires. The bid, 65 percent above the previous day’s close, was rejected by Bancroft family members who control more than 50 percent of the voting power at the New York-based publisher.

“News Corp. may have opened the door for other bidders, including General Electric Co., owner of the CNBC news network, Haverty said. Washington Post Co., Gannett Co. and even Google Inc. may be interested, said Michael Chren, managing director of Allegiant Asset Management Co. in Palm Beach Gardens, Florida.”

Read more here.

Why the Wall Street Journal is worth more than other papers

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David von Drehle has a great analysis on Time magazine’s web site about why Rupert Murdoch’s $5 billion offer for Dow Jones & Co., the parent of The Wall Street Journal, values the newspaper at a much higher price than other papers.

Wall Street JournalVon Drehle wrote, “The Journal is not like other newspapers. About the only thing it has in common with your metro daily is the paper they’re printed on. Where most newspapers make their money by aggregating mass audiences to read grocery, automobile and classified ads, the Journal’s business is built on an elite audience that highly values the information the paper provides. This audience in turns attracts advertising for luxury goods and financial services unavailable to most other dailies.

“The evidence is growing that this is exactly the right place for a newspaper to be. As circulation for most papers continues to fall, the Journal’s is growing. Last month’s figures from the Audit Bureau of Circulation showed that the Journal posted another increase on top of its robust 2006 gains, to 1,721,694 subscribers.

“Perhaps most important of all, the Journal is light years ahead of other newspapers in training its readers to value information on the Internet. The Wall Street Journal Online was the first major news site to charge for access, and it remains by far the most successful pay-for-news operation, with nearly 800,000 subscribers.

“And because the Journal has an elite, well-trained audience, it is able to target its coverage more efficiently than the many newspapers that find themselves chasing an ever-more atomized audience into far-flung suburbs.”

Read more here. Von Drehle’s number for the Journal’s online subscribers is low. Earlier this week, the company put the number at above 930,000.

Deal or no deal? Bancroft family says no deal

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Dow Jones & Co. issued a statement after the markets closed saying that a member of the Bancroft family, which controls more than 60 percent of the stock in the company, is not interested in selling the parent of The Wall Street Journal, Barron’s and Marketwatch to News Corp. for $5 billion.

Deal or No Deal?The release stated, “Dow Jones & Company (NYSE:DJ) said that a director who is a representative of the Bancroft family, Michael B. Elefante, has informed the Dow Jones Board of Directors that ‘members of the family and the trustees of trusts for their benefit have advised him that they will vote shares constituting slightly more than 50% of the outstanding voting power of Dow Jones as of April 30th excluding options against the proposal submitted by News Corporation to acquire all of the outstanding shares of Dow Jones common stock and Class B common stock for $60.00 per share.’

“Dow Jones said its Board would factor this information into its evaluation.”

Read more here.

GE could enter bidding for Dow Jones

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Russ Britt, the Los Angeles bureau chief for Marketwatch, writes Tuesday that General Electric Co. might be forced to make an offer for Dow Jones & Co., to prevent rival News Corp. from buying the owner of The Wall Street Journal, Marketwatch and Barron’s.

GE is the parent company of NBC and business news cable network CNBC, which has an agreement with the Journal to provide content.

Britt wrote, “General Electric, in particular, could face trouble if it doesn’t at least make a countermove as the deal gives News Corp. an instant source of content for its planned Fox business channel. GE owns the business-news cable channel CNBC.

“The price that News Corp. is offering, however, could deter most, if not all, potential suitors from making a play, said Benchmark’s Atorino. He said acquiring Dow Jones makes the most strategic sense for News Corp. and that a deal would create an awkward fit for other would-be bidders.”

Britt also wrote that if the Bancroft family, which controls more than 64 percent of the Dow Jones voting stock, turns down the offer, then they would likely face a lawsuit from other shareholders.

Read more here.