It’s Bancroft Decision Day today, and the press is still full of stories saying
that the vote is "too close to call," or words to that effect. Obviously,
every vote counts, it could go either way, this is like a rerun of Florida 2000…
right?
It turns out, not so much. The WSJ gives
the game away today:
As of late last night, nearly 28% of the votes favored the deal, according
to a person close to Dow Jones’s board. Common shareholders representing 29%
of the overall voting shares are expected to vote for the deal in overwhelming
numbers, thereby ensuring a majority. News Corp. needs 30% to assure a comfortable
margin. It is unclear whether News Corp. would proceed with less than that.
Murdoch needs more than 50% of the votes in order to make this deal happen.
He has 29% of the votes already, in the form of arbitrageurs and other holders
of common stock, who are all ecstatic that their DJ shares might fetch $60 apiece.
So, simple subtraction would lead us to the conclusion that he needs another
21% of the votes in order to reach the 50% hurdle. Since he already seems to
have family members representing 28% of the votes in the bag, he’s long since
passed that point. (For those of you mathematically challenged on a Monday morning,
29% + 28% = 57%.)
Does anybody really believe that Murdoch wouldn’t go ahead with this deal with
a mere 57% of the votes? That the difference between 57% and 59% is crucially
important to its success? I don’t buy it. I do understand that a few holders
of common shares can be forgetful; that many unexpected things can go wrong;
that what the WSJ calls "a comfortable margin" is a very nice thing
to have.
But I don’t believe it’s a dealbreaker.
My feeling is that Murdoch is going to go ahead with his Dow Jones acquisition
no matter what, since he has substantially more than 50% of the vote behind
him. Obviously, it doesn’t behoove him to say so right now: he wants as many
votes as he can get out of the Bancrofts. But there’s no way, after coming all
this way, that he’ll let the absence of a "comfortable margin" derail
the acquisition of a lifetime.