Entrepreneur eyes plan to buy Dow Jones
Los Angeles Internet entrepreneur Brad Greenspan said Friday that he was still working on a last-ditch plan to buy crucial Dow Jones & Co. shares and head off the company’s sale to News Corp.
The Bancroft family, which has controlled the publisher of the Wall Street Journal for more than a century, will meet Monday in Boston to discuss whether it should support a sale to Rupert Murdoch’s media giant for $5 billion.
About three dozen family members and their lawyers control stock having 10 times the voting power of commonly traded Dow Jones shares. All told, the Bancrofts have more than 64% of the company’s votes.
Influential family members, including Dow Jones directors Christopher Bancroft and Leslie Hill, are opposed to the Murdoch transaction, and Bancroft has been seeking funding to buy some of his relatives’ shares at the $60 purchase price News Corp. is offering. Because the super-voting shares don’t lose their power if they stay in the family, that could give Bancroft enough clout to stop the sale.
Greenspan has been trying to ally himself with Christopher Bancroft or other members of the family, promising to help them buy their relatives’ shares as part of a larger strategic plan.
As of late Friday, none of the family members had committed to working with Greenspan, who ran the company where MySpace began. Greenspan, worth more than $100 million by himself, said he and unnamed investors had pledged “hundreds of millions” to buy shares.
“We’re engaged with different members of the Bancroft family and facilitating calls between them and investors,” Greenspan said in an interview.
Greenspan issued a news release Friday outlining his idea, which calls for Dow Jones to buy back more of its shares and borrow to invest in a new cable television channel, increased video offerings and an improved and free consumer-oriented website.
Arguing that Dow Jones shares could reach $100, Greenspan said his investment group would loan Bancroft family members $400 million to $600 million so they could buy out their relatives. The investment group would then get the right to keep increases in the stock value beyond $60.
Because it is unclear what rules govern which of the 40-odd Bancroft family trusts, the “magic number” of shares the group would need to block Murdoch isn’t known yet. Greenspan said he hoped to learn after Monday’s meeting. In the meantime, he said, “we felt it was important to get the financial information out there to family members and other shareholders.”
Without a firm commitment from named lenders and an openly allied member of the Bancroft family, it will be tough for Greenspan to present himself as an alternative in Monday’s debate, especially because he won’t be there in person.
But Greenspan said he would work through the weekend in hopes of solidifying his plan.
