Do Dow Jones' Bancrofts Have Fiduciary Duty to Other Shareholders?

If so, the rejection of the News Corp offer is going to get sticky.  $60 a share is a massive premium over Dow Jones's average trading price over the past twenty years, and it is close to the stock's all-time peak back in 2000 (a bubble-related spike).  Dow Jones shareholders have been awfully patient for an awfully long time, and however attached they may be to the company's timeless and influential brands, they are also presumably focused on their bottom lines.

The Bancrofts' rejection of Murdoch's offer may be a negotiating move (why not?), but if Murdoch raises his offer--or even if he simply reiterates it--the family will likely take increasing heat from the other shareholders and board members.  And as long as the "fiduciary duty" standard applies (which it may not--anyone know?), if the Bancrofts refuse to deal, they will presumably be opening themselves up to legal liability.  The Bancrofts' expressed desire not to see the Journal fall into Murdoch's hands--and to have the Journal-less Bancrofts become "just another rich family")--is presumably not logic shared by the average shareholder.

UPDATE

According to an attorney quoted in the Journal, the family does NOT have a fiduciary duty here, at least not as a unit.  It also sounds as if the family ownership is so diluted that it shouldn't be viewed as a single entity (which certainly creates possibilities for Murdoch).

Comments

[hack]

BFD. If they don't like it, the shareholders can unload their shares on the open market for almost as high as Murdoch's offer.

[Henry Blodget]

Yes, but the lawsuit will come from those they have unloaded them on--who, presumably, will regard it as an act of irresponsible fiduciary lunacy if the Bancrofts reject the deal.

[King Troll]

Henry I dont like how you bombared the board with your sidekick's newsletter. Sure, it adds more news, but most of it is just FRAT (Forget Reading All That). I read like 10% of it. Also, you killed the customer comments.

[Henry Blodget]

Thanks, KT (seriously). We're experimenting--seeing what people like and what they don't. Keep the comments coming...

[Ryan]

I hate to admit it, but I agree with KT. In fact, I was just telling myself this blog was dead since all of this "crap" started. It is probably good information, but keep the format similar to before. Folks don't like change, and things got really cluttered with the new stuff and made it about worthless to follow.

Just my 1/2 cent.

[kuos]

Well, this is why people might want to think twice about buying into a company which is rigged so that a minority group can maintain voting control through special "Class B" shares. Another notable example of this is GOOG.

[Rick Stratton]

I didn't mind the sidekick's stuff. But Henry's posts are more readable and more insightful.

Maybe find a way to highlight Henry's stuff so it sticks out and we can avoid the others.

[batteries]

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