Family Business Magazine E-Newsletter
July 17, 2007



Contents
1.  News Corp. reaches tentative agreement to buy Dow Jones.
2.  Apollo Management tops Basell bid for Huntsman.
3.  Florsheim family revives its shoe company after reacquisition.
4.  Member of founding family behind Toyota's new U.S. strategy.
5.  How families can help close the gender gap.
6.  Celebrating a special anniversary.





1.  News Corp. reaches tentative agreement to buy Dow Jones.  Rupert Murdoch's News Corp. last night reached a tentative agreement to purchase Wall Street Journal publisher Dow Jones & Co., according to news reports. Murdoch "resisted pressure from Dow Jones" to raise his original $5 billion bid, the Journal reported. The Washington Post reported that Dow Jones wanted Murdoch to raise his $60-per-share offer by $2 to $3 per share, "an amount that had come to be known as a 'tip' to help placate the Bancrofts, the family that controls Dow Jones.... Murdoch's bid represents a significant premium on Dow Jones stock before his offer, when shares were trading in the mid-$30s." But the Bancrofts remain divided on whether to sell. Christopher Bancroft, a Dow Jones director who serves as a trustee overseeing shares that account for about 15% of the company's total shareholder votes, "has spent the past several weeks approaching hedge funds, private-equity firms and others in an attempt to buy enough shares of Dow Jones to block a sale," the Journal article said. Another family member, Leslie Hill, "has pressed the company to meet with" supermarket billionaire Ron Burkle and Internet entrepreneur Brad Greenspan to discuss alternatives. "Ms. Hill's mother, Jane Cox MacElree, serves as a trustee for or owns shares that account for about 15% of the company's total shareholder vote," according to the Journal. One of the proposed alternatives is "to buy out only those members of the Bancroft family who wanted to sell," the New York Times reported; another is an employee stock ownership plan. The Times noted that "While the Bancrofts might like a deal that let some or all of them cash out, it would infuriate other shareholders who would be left out of the windfall." Jim Ottaway Jr., whose family sold a small chain of papers to Dow Jones and owns 6.2% of the company's supervoting shares, has also criticized the proposed sale to Murdoch. The Murdoch deal is scheduled to be presented to the full Dow Jones board for approval tonight; a meeting at which the Bancroft family's lead trutee, Michael B. Elefante, will present the agreement to the family is set for Thursday. "Mr. Elefante is expected to give the family several days to make a decision," according to the Journal. (Sources: Wall Street Journal, July 17, 2007; Washington Post, July 17, 2007; New York Times, July 11, 2007; Columbia Journalism Review, July 9, 2007.)

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2.  Apollo Management tops Basell bid for Huntsman.  Buyout firm Apollo Management LP trumped Basell International Holdings BV's bid for family-controlled chemical firm Huntsman Corp. with a $6.51 billion offer, the Wall Street Journal reported. The deal must undergo a regulatory review of potential antitrust issues. "Huntsman was put in play after MatlinPatterson Global Advisors LLC, which owns about one-third of it, began exploring a way to sell its stake," the Journal article said. "Huntsman, which split the cost with Apollo of a $200 million termination fee for breaking up its previous agreement with Dutch-based Basell, said in a regulatory filing it would pay Apollo $225 million in a break-up fee if it terminated the deal under certain circumstances," Reuters reported. "It will also reimburse Apollo, which is buying Huntsman through its Hexion Specialty Chemicals unit, the $100 million it spent on the Basell deal's break-up fee for a total pay-out of $325 million, or about 5 percent of the deal's total value."  (Source: Wall Street Journal, July 5, 2007, July 13, 2007; Reuters, July 13, 2007.)

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3.  Florsheim family revives its shoe company after reacquisition.  In 2002, Thomas Florsheim Jr. and John Florsheim, great-grandsons of the founder of shoe company Florsheim Group, bought the company, which had been owned by outside investors for 50 years and had gone bankrupt, according to a recent profile in the New York Times. Since they acquired the company, "They've picked their family name out of the garbage bin and polished it up and made it a success again," a retail analyst told the Times. The company's problems stemmed partly from the strained relationship between Thomas Florsheim Sr. and his father, Harold, the last family member to run the company, the article reported. Harold sold the company to the International Shoe Company (now Interco) in 1952 but continued to run it. When Thomas Sr. joined the company, he clashed repeatedly with his father. In 1964, Thomas Sr. bought stock in the Weyenberg Shoe Manufacturing Co. and quit Florsheim. Weyenberg thrived while Florsheim declined. Thomas Sr. retired in 1999; his family now owns more than a third of the publicly traded Weyco Group, which distributes footwear lines including Nunn Bush, Stacy Adams, Brass Boot and Florsheim, according to the Times. The Weyco Group owns Florsheim's American and European wholesale businesses, all its European retail stores and 23 of its 217 U.S. stores, plus worldwide rights to the Florsheim name.  (Source: New York Times, June 24, 2007.)

For stories of how other families reclaimed their businesses, see "Mining the past" by James Careless, "Rescuing a legend" by Kathryn Levy Feldman, and "Wrestling with a giant" by Barbara Spector, all in the Autumn 2003 issue of Family Business Magazine. Subscribers to our print edition may view the full text of these articles free of charge in our password-protected Articles Library.

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4.  Member of founding family behind Toyota's new U.S. strategy.  Shoichiro Toyoda, honorary chairman of Toyota Motor Corp. and a key member of the company's founding family, along with former company chairman Hiroshi Okuda -- both members of Toyota's board of directors -- "are concerned that the car maker may have built too many U.S. factories," according to the Wall Street Journal. Last fall, with Toyoda's support, Okuda "questioned whether top executives were becoming 'a bit complacent' with manufacturing-capacity expansion ... and whether they viewed the rapid plant building in the U.S. as a given," the Journal reported. "Messrs. Okuda and Toyoda also expressed concern about rising wages at Toyota's U.S. plants, all but one of them nonunion.... [T]he concerns raised by Messrs. Okuda and Toyoda made it more urgent to find a 'low-cost business model' for the U.S."  (Source: Wall Street Journal, June 20, 2007.)

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5.  How families can help close the gender gap.  How can business families help ensure that the family business benefits from the talents of female as well as male relatives? In The Family Business Policies & Procedures Handbook, family business advisers Leslie Dashew, Jane Hilburt-Davis, Bonnie Brown Hartley, Cathy Sunshine and Kay Wakefield Abromowitz offer some suggestions:
  1. Raise children to pursue all types of opportunities. Parents play a crucial role in preparing their children for future success, but they often fail to recognize the subtle messages they convey. Parents must recognize that from an early age youngsters are observing parental behavior and heeding messages about gender roles.
  2. Establish a family council as a place for family members to learn about opportunities and consider careers. A family council can be a forum for conversations about the family, creation of employment guidelines, education about the business and decision making about the future of the company. This venue encourages youngsters to connect to the family and the business.
  3. Create opportunities for women to participate in family and business governance. So often, we hear that Mom was an "informal" counsel to Dad or the "power behind the throne." This sends a message to young girls that women cannot have a position "out front" in the family business. Providing legitimate roles for women in family organizations is key to demonstrating gender neutrality.
  4. Encourage female relatives to network with other family business women. Participation in forums and programs for women business owners provides educational and networking opportunities.


For tips on policies and procedures that companies can initiate to ensure that women have equal opportunities -- plus suggestions for aspiring female family business leaders -- see The Family Business Policies & Procedures Handbook. Learn more about the book and see the table of contents here.

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6.  Celebrating a special anniversary.  Wm. Sullivan & Son Funeral Directors celebrated its 100th anniversary last year. "As the special year approached," third-generation co-owners Ray Lope and John Sullivan write in the Summer 2007 issue of Family Business Magazine, "we decided to celebrate the occasion by showcasing our commitment to the metro Detroit communities we serve." Lope and Sullivan note that "Our 100th anniversary offered a great opportunity for us to reexamine the family business. We also took the time to think about how we wanted to move forward. Our family brainstormed about how best to approach the celebration and considered many ideas." Here are their tips for other firms about to reach a milestone:


For details on Wm. Sullivan & Son's celebration, see "On a funeral home's anniversary, a celebration of life" by Ray Lope and John Sullivan 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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