A director on the board of Dow Jones & Co Inc has resigned because he could not support its endorsement of a $5 billion takeover offer from Rupert Murdoch's News Corp.
Dieter von Holtzbrinck said on Thursday that Murdoch's $60-per-share offer was "very generous in financial terms" but he was concerned that Dow Jones's journalistic values would "strongly suffer" if the sale goes through.
The fate of the deal is now in the hands of the Bancroft family, which controls Dow Jones through voting shares.
Some analysts said von Holtzbrinck's vocal opposition could sway some members of the family when they meet on Monday to discuss whether to allow Dow Jones properties like The Wall Street Journal to be added to Murdoch's media empire.
"If there are Bancrofts who are wavering, I think that would be a factor in pushing them to vote 'no,'" said veteran newspaper analyst John Morton. "I'm sure some of the Bancrofts had probably wished he'd stayed there to vote 'no.'"
Von Holtzbrinck is the first non-family director to publicly oppose Murdoch's bid for Dow Jones, which also publishes the Barron's investor's newspaper, the MarketWatch.com financial news site and Dow Jones Newswires.
"Listening to our lawyers, one has to vote for a deal which is in the best (financial) interest for the shareholders, except if one can prove that such a deal bears risks for the company that overcompensate the financial profits," von Holtzbrinck wrote in a letter that Dow Jones filed with the U.S. Securities and Exchange Commission.
"I cannot prove my worries are right," he wrote. "I can only refer to News Corp practices in the past."
Von Holtzbrinck's move puts him in the camp of an undetermined number of Bancroft family members who oppose Murdoch's offer because they fear he would interfere in Dow Jones's news operations to further his business interests.
A spokesman for the Bancrofts could not be reached for comment. Dow Jones declined to comment beyond the SEC filing, and News Corp. also declined comment.
"Dieter von Holtzbrinck has served Dow Jones with distinction as a director since 2001," Dow Jones Chairman Peter McPherson said in a statement. "The board has accepted his resignation and we wish him well."
Charles Elson, director of Weinberg Center for Corporate Governance at the University of Delaware, said that Von Holtzbrinck's resignation would not have a direct impact on the deal.
"It's not helpful, but it doesn't really affect the transaction directly," he said.
Dow Jones's board voted on Tuesday to endorse the buyout offer. One director, Christopher Bancroft, left the meeting before the vote occurred, according to The Wall Street Journal. Two other Bancroft family directors voted in favor of the deal, while von Holtzbrinck abstained, the newspaper reported.
Board member David Li did not vote, the newspaper said. Li may face civil charges in a U.S. Securities and Exchange Commission investigation into insider trading before the News Corp bid was disclosed. Li has denied any wrongdoing.
Von Holtzbrinck is chairman of the supervisory board of Verlagsgruppe Georg von Holtzbrinck GmbH, according to the Dow Jones Web site.
The privately held German publisher owns the Macmillan Ltd. publishing house, as well as book publishers Farrar, Straus & Giroux, Picador and St. Martin's Press, according to the Holtzbrinck Web site.