Bancrofts need board, and board needs Bancrofts

Richard Perez-Pena of The New York Times writes Friday that despite the fact that the Dow Jones & Co. board has taken over the negotiations to sell the company to News Corp. CEO Rupert Murdoch, the board needs the Bancroft family that controls the company, the parent of The Wall Street Journal, and vice versa.

Perez-Pena wrote, “The family said this month that it would try to work out an agreement with News Corporation, and then would permit the Dow Jones board to begin negotiations on price and other terms. But the board and the Bancrofts agreed on Wednesday to put both matters in the board’s hands, to be negotiated simultaneously.

“‘That clearly gives you the best chance to get a higher price, which is the board’s primary fiduciary duty,’ said someone close to the board, who insisted on anonymity because he was not authorized to discuss the matter. ‘The board had some concern about the family trading away leverage’ before the negotiations even began.

“People advising both the company and prospective buyers say that Dow Jones is in an unusual and potentially awkward position: the board cannot make a decision without the family, nor the family without the board.”

Read more here.