Thursday, May 3, 2007
The board of directors of Dow Jones & Co. (parent of the Wall St. Journal) met for over four hours yesterday and announced that it "would take no action" on Rupert Murdoch's $5 billion bid because members of the Bancroft family holding 52% of the voting power opposed it. The wording may have left the door open for Murdoch, who is known for his patience in getting what he wants. He has suggested a meeting between his family and the Bancrofts. See NYTimes, First the Bid, Now the Jockeying. The Wall St. Journal provides further information about the Bancroft family, which has many branches and several generations, presenting the possibility that for some a 67% premium presents an attractive opportunity. See WSJ, At Dow Jones, Focus Is on the Bancroft Family. The WSJ also highlights someone who is a key player in the drama: Michael Elefante, a Boston trusts and estate lawyer who sits on the Dow Jones board and is trustee for one Bancroft family trust. See WSJ, Murdoch Bid Puts Trustee on the Spot.
Meanwhile, there was more specific information about the unusual activity in Dow Jones options in the week preceding the public announcement of the bid. On April 25 someone purchased an option to buy 280,000 shares for $40 in September. This is an unusually large amount of shares, the stock price at the time was $36, and it had not traded at $40 in over a year. See NYTimes, Heavy Options Activity Stirs Suspicions.