Family Business Magazine E-Newsletter
July 3, 2007



Contents
1.  Dow Jones, News Corp. said to agree on editorial plan.
2.  New York Times seen as unlikely takeover target.
3.  Huntsman to be acquired by Bassell Polyolefins.
4.  How to combat leadership burnout.
5.  Due diligence on a prospective buyer.





1.  Dow Jones, News Corp. said to agree on editorial plan.  Rupert Murdoch's News Corp., which has offered $5 billion to buy the Bancroft family's Dow Jones & Co., has reached a tentative agreement with the Dow Jones board on editorial independence of Dow Jones' Wall Street Journal, according to news reports. "Much of the wording is vague, leaving operations to a mutual agreement between the two parties," the Journal reported on July 3. The Bancroft family is now "being polled on whether they support a sale to Murdoch," the Washington Post reported. Murdoch told Reuters on June 27 that "The final approval is in the next two, three weeks' time or not at all." A July 2 Journal article noted that lawyers from Hemenway & Barnes in Boston hold the key to the sale because they hold "two of the three seats on a number of key trusts, with the third held by a family member.... On one of the biggest trusts, lawyers from the firm are the only trustees." After the Dow Jones board took over negotiations from the Bancrofts on June 20, the pace of negotiations escalated, according to a Journal report. The article said Murdoch found the Bancrofts' June 22 proposal on editorial independence to be "insulting," and prepared to withdraw his offer. But "a top News Corp. executive called a Dow Jones board adviser, and they agreed that the two sides could negotiate," the Journal reported. A June 21 Journal article said several independent Dow Jones directors "raised questions about what would happen if Mr. Murdoch withdrew his offer.... These directors were concerned about their possible liability to shareholders in the event the deal fell through." The article also said, "Some [Bancroft] family members believed their May 31 statement stating they were willing to explore a sale of Dow Jones would spur competing offers. Instead, it set off a chain reaction that sent the family and Dow Jones on a fast track toward a deal with News Corp." One June 29, the Journal reported that Bancroft family member Leslie Hill, who initially favored selling the company to Murdoch, "has had an apparent change of heart. In recent days, she has been scouring the East Coast, trying to drum up other offers for the company...." The article said Hill "threw herself into the minutiae of drafting editorial principles to protect the journalistic integrity" of the Journal and Dow Jones Newswires. "[H]er activities reflect the deep ambivalence of a family readying to give up a legacy it has held for generations.... Ms. Hill's campaign also highlights the mistrust some members of the family have felt toward the company's advisers, who are being criticized by the family and others on Wall Street for mishandling certain aspects of the process."  (Sources: Wall Street Journal, June 21, 2007, June 25, 2007, June 28, 2007, June 29, 2007, July 2, 2007, July 3, 2007; Washington Post, June 29, 2007; Reuters, June 27, 2007.)

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2.  New York Times seen as unlikely takeover target.  Shares of the New York Times Co. have risen since Rupert Murdoch's offer to buy Dow Jones was made public on May 1, but "there is no evidence that any such buyout bid looms" at the Times, according to a report on TheStreet.com. "In sharp contrast to Dow Jones CEO Rick Zannino, who has been all but silent through Murdoch's buyout campaign, New York Times CEO Janet Robinson has been an outspoken defender of the company's corporate structure and its unwillingness to consider strategic alternatives," the article said. Wayne State Law School professor Steven Davidoff told TheStreet.com that "unlike Zannino, Robinson is free to speak out in these situations because she has the blessing of the company's board of directors. New York Times' board is effectively controlled by the Sulzbergers, since the family elects nine of the company's 13 directors." Furthermore, the article said, "At Times, the Sulzberger family controls the board through a single trust that is required to vote unanimously, so the divisions that emerged within the Bancroft clan could not occur at New York Times. Furthermore, the Sulzbergers are more actively engaged in the Times' management, principally through Arthur Sulzberger Jr. -- the company's chairman and the publisher of its flagship newspaper. The Bancrofts play no part in Dow Jones' operations."  (Source: TheStreet.com, June 11, 2007.)

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3.  Huntsman to be acquired by Bassell Polyolefins.  Chemical company Huntsman Corp. has agreed to be acquired by Dutch company Bassell Polyolefins for $5.6 billion. "The acquisition, set to close in the fourth quarter, is being backed by the Huntsman family, which owns 57% of the shares outstanding," the Wall Street Journal reported.  (Source: Wall Street Journal, June 26, 2007.)

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4.  How to combat leadership burnout.  Even the most successful family business CEOs can fall victim to leadership fatigue, notes family business adviser James E. Barrett in The Family Business Leadership Handbook. This malaise can result from having been the boss for a long time, or because of continued worry over money or market matters. When it sets in, the company is bound to suffer as a result. The solution involves acknowledging that the problem exists and developing an action plan that presents new challenges, Barrett writes. "Some people are able to work through these down periods by themselves.... They read, listen, develop a program for themselves and carry it out. Others benefit from talking with old friends, directors or advisers, or outside consultants. Whatever the outcome of these talks, an action plan is the next step."



For examples of how three executives overcame leadership burnout, plus other tips on improving your leadership skills and developing leaders in your family and business, see The Family Business Leadership Handbook. Learn more about the book and see the table of contents here.

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5.  Due diligence on a prospective buyer.  When it comes time to sell the family company, a business owner must carefully evaluate the potential buyers, writes M&A adviser Paul Schaye in the current issue of Family Business Magazine. Schaye recommends that business owners ask the buyer for a snapshot of deals from at least the past three years and no fewer than five references that reflect transactions similar to the one involving your business. He suggests the following questions to help you determine whether the buyer is legitimate:


For more information, see "Will a sale of your company meet your family's needs?" by Paul Schaye in the Summer 2007 issue of Family Business Magazine. Visit our website for subscription information.

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Family Business Magazine's new Classified advertising section debuts Autumn 2007.  Buy, Sell & Trade with other family-owned businesses in the following categories: Business for sale, Wanted to buy, Supplies, Equipment for sale, Buildings/land for sale, Barter/trade, Misc. $150 per inch per category (approx. 50 words). First 10 one-inch ads received will run free of charge! Call Barbara Wenger at (215) 405-6072 or e-mail bwenger@familybusinessmagazine.com.

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