Minority of Bancrofts could block sale

Floyd Norris of the New York Times writes Monday that a minority of the Bancroft family members could block Dow Jones & Co.‘s sale to News Corp. He projects it could happen if there are Bancroft family members owning 9.1 percent of the Class B shares who refuse to sell the owner of The Wall Street Journal.

Norris wrote, “But could a family minority block such a sale? Under certain circumstances it is possible, because of the nature of the super-voting stock that Dow Jones has, for a family minority to obtain a veto when the rest of the family decides to sell.

“‘Unlike some controlling shareholders, the Bancrofts cannot sell control,’ said Jeffrey Gordon, a professor at Columbia University Law School who has written extensively on dual class ownership of shares. ‘This raises the possibility that a minority of the family could block the sale.’

“Under Dow Jones rules, Class B shares have 10 votes per share, while Class A shares, the ones traded on the New York Stock Exchange, have but one vote. But when Class B shares are sold, they become Class A shares, and lose their special voting rights.”

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