Rupert Murdoch had a management retreat in California a few days ago.
In an excellent piece today about the founder of News Corporation, Richard Siklos includes this great final paragraph:
As he wrapped up the conference in Monterey last Sunday, he looked out at his employees and said: “You all think I’m too old.” Pausing for a beat, he added: “I think you’re too old.”
Yes, he is right:
This industry has too many old people around today.
But Murdoch is not one of them.
Andrew Ros Roskin asks in today’s New York Times:
What To Do When Rupert Calls?
Some of his insights:
Dow Jones’s chief executive, Richard F. Zannino, appears to be a clear advocate of a sale to Mr. Murdoch, describing the benefits of a deal to the board this week, according to people at the meeting.
A week before Mr. Murdoch made his bid, the two men had breakfast in Mr. Murdoch’s office.
Mr. Zannino has been flirting with Mr. Murdoch for years — often over meetings put together by bankers like Mr. Murdoch’s longtime adviser James B. Lee Jr. of JPMorgan Chase.
The News Corporation is also being advised by Nancy Peretsman of Allen & Company and Blair W. Effron of Centerview Partners.
Mr. Zannino stands to make a handsome personal profit if Dow Jones is sold, of course, but when the chief executive thinks that it is better to sell the company than to keep it, shareholders should consider that a clear sign that some sort of financial impasse has been reached.
The Bancrofts have clearly reached such an impasse — some of it of their own making and some of it attributable to revolutionary business shifts beyond their control.
If the family cares about preserving the Dow Jones legacy and seeing the company continue to flourish, it’s time to be financially creative.
Rupert Murdoch is knocking on their door.
Photomontage by The New York Times.
Oh boy, BusinessWeek is for the sale.
Some of the arguments:
The Bancrofts may have voting control.
But the board still has a fiduciary duty to the rest of the shareholders at the company.
Because the premium from Murdoch’s News Corp. (NWS) is so substantial, directors could open themselves up to liability if they reject the bid and the stock price drops back from nearly $60 a share to $30 — or even lower.
The Bancroft family does have voting control over the company, but there’s “a limit to their ability to say no,” one shareholder told Betsy Streisand at U.S. News & World Report.
Zac Bissonette, one of the most active writers at AOL (NYSE: TWX – news)’s bloggingstocks, dug up the details behind the dilemma.
He looked through the company’s rules of corporate governance and found that the “principal duty” of the board and management is to make sure that the company is “well-managed in the interest of its shareholders.”
But the rules also say that the company should “protect and preserve the quality, independence, and integrity of its products and services.”
Then Bissonette writes that “those two stated goals may be in direct contradiction with each other as the company considers News Corp’s bid.”
The pressures will only grow if other bidders enter the fray and the price offered rises.
There’s a chance that the bidding will go much higher. At CFO.com, famed investor Michael Price, who owns a chunk of Dow Jones, says he thinks the bidding could go to $100 a share.
