Director quits Dow Jones board
A Dow Jones & Co. director resigned Thursday, citing fears that the publisher’s journalistic values would “strongly suffer” after a sale to Rupert Murdoch’s News Corp.
Dieter von Holtzbrinck, a board member since 2001, wrote to colleagues that he couldn’t support the decision to sell the Wall Street Journal owner if the controlling Bancroft family approves.
He said he couldn’t prove that the risks of improper interference in the news decisions of the Journal outweighed the financial benefits of Murdoch’s “very generous” $5-billion offer. “I can only refer to News Corp. business practices in the past,” Von Holtzbrinck wrote in a letter filed with market regulators.
The retired German publishing executive added he didn’t believe that a committee designed to protect top editors from meddling “can finally prevent Murdoch from doing what he wants to do, from acting his way.”
The resignation came as attention moved from the board to the Bancroft family, which will hold a historic meeting Monday in Boston to debate whether to sell. About 40 family trusts hold most of the shares that have extra voting power, so a clear majority decision among the trustees of those trusts would determine whether the News Corp. bid succeeds.
The longtime lead attorney for the Bancrofts on investment matters, Dow Jones director Michael Elefante, is expected to make a presentation in support of the deal.
Christopher Bancroft, another director, is leading a campaign in opposition that could include an offer to buy shares from relatives who want to sell at $60, which is what Murdoch is offering. Bancroft would then vote those shares against the transaction. He and fellow dissident Leslie Hill might bring their own advisors to the meeting.
An alternative restructuring of the company was put forward last week by Ron Burkle, the Los Angeles investor advising a union of Dow Jones employees. But that idea hasn’t been formalized.
Dow Jones said Thursday that its second-quarter profit dropped 27% to $21 million, or 25 cents a share, because of increased costs for stock-related compensation. Those expenses increased when the stock shot up from the mid-30s to near $60 on Murdoch’s offer.
