Murdoch Can Thank Lawyers for WSJ Deal
Posted Jul 31, 2007 11:57 AM CST
By Debra Cassens Weiss
The cost of outside advisers–including some of the biggest names in law–may have persuaded reluctant members of the Bancroft family to approve the sale of Dow Jones and the Wall Street Journal to Rupert Murdoch, CNBC is reporting.
Fees to legal and financial advisers could amount to at least $30 million, the Wall Street Journal (sub. req.) reports. Law firms providing counsel include Boston-based Hemenway & Barnes and Wachtell, Lipton, Rosen & Katz.
Bancroft holdouts "suddenly realized that if they were to turn down this deal, they would also be on the hook for paying all those fees to their advisers," including Merrill Lynch and the law firms, reporter David Faber told viewers this morning. "It adds up to a big number. So they started to change their minds."
Family members decided that if they approved the deal, they could try to get Murdoch to cover the fees, Faber said. And that resulted in a large enough percentage of Bancrofts favoring the deal.
A key holdout was a Bancroft trust holding 9.1 percent of voting shares that was overseen by a Denver law firm, the Wall Street Journal reports. The fee issue proved persuasive, causing the trust to change its position against the buyout.