Tom Bawden in New York
America’s biggest shareholder advisory group accused the Dow Jones board yesterday of failing in its fiduciary duty by not opening discussions after News Corporation’s unsolicited $5 billion (£2.5 billion) offer.
Institutional Shareholder Services (ISS) said that the board had a duty to talk to News Corporation, parent company of The Times, because its $60-a-share bid represented a 67 per cent premium to Dow Jones’s price before the approach became public. ISS’s criticisms came as Rupert Murdoch, News Corp’s chairman and chief executive, stepped up his campaign to woo Dow Jones’s controlling Bancroft family.
In a letter to the family, he offered them one seat on News Corp’s board and reiterated his intention to install an independent board at The Wall Street Journal.
Patrick McGurn, the executive vice-president of ISS, said: “I think the [Dow Jones] board is violating its fiduciary duty to shareholders if it fails to take this offer very seriously and enter talks with News Corporation. I don’t see how any director could look at the premium being offered and not open a dialogue.”
The board said this month that it would take “no action” on News Corp’s offer for Dow Jones. The decision was made on the basis that the Bancrofts had said that they were ready to vote shares constituting about 52 per cent of voting power against the proposal.
However, by failing to reject the offer outright, Dow Jones left the door open for discussions to be held if News Corp came back with a higher offer. Dow Jones declined to comment on the ISS criticisms.