The board of Dow Jones last night sidestepped a $5 billion (£2.51 billion) unsolicited bid from News Corporation, parent company of The Times, after the directors effectively sided with Dow Jones’s controlling Bancroft family, who had openly opposed the deal. The decision came despite pressure from Wall Street to consider the proposal seriously.

The board’s decision to take “no action with respect to the proposal” seemed to have headed off a potentially unstable situation since the Bancroft family and its lawyer occupy just four of the board’s 16 seats even though they control more than 60 per cent of the voting shares.

Dow Jones said that it had been advised that the family and trusts for their benefit would vote shares constituting about 52 per cent of the outstanding voting power of Dow Jones against the proposal by News Corp.

Dow added: “Approval of a merger under Delaware law requires approval of a majority of the outstanding voting power of the corporation. Accordingly, the Dow Jones board of directors has determined to take no action with respect to the proposal.”

The statement fell short of an outright rejection by the board of the News Corp offer. A News Corp spokesman said his company’s offer still stood.

Dow Jones took financial advice from Goldman Sachs. The approach by Rupert Murdoch, the chairman and chief executive of News Corp, offered the family various concessions in the hope of persuading them to agree to a takeover.

News Corp had offered to safeguard the editorial independence of The Wall Street Journal, Dow Jones’s most eminent newspaper, with the creation of an independent board. It hinted that Mr Murdoch was keen to invest heavily in the financial paper.

However, senior members of the Bancroft family — who see it as their duty to protect the heritage of The Wall Street Journal, America’s second-best-selling newspaper — had said on Tuesday that family members “constituting slightly more than 50 per cent of the outstanding voting power” would vote against the $60-a-share bid.

That, though, did not kill off News Corp’s interest, amid some evidence of a small split in the family. The Bancrofts control 64.7 per cent of the voting stock, but 24.7 per cent of the economic interest — implying that shareholders accounting for 14 per cent of the votes had yet to rally to the defence.

Dow Jones’s shares, which had soared on Tuesday by 55 per cent to $56.20, eased only slightly, by 20 cents to $56.00, as Wall Street took the view that a deal could yet be done. Jean-Marie Eveillard, of First Eagle Global Fund, which owns Dow Jones shares, said: “I think investors who own the shares will be almost unanimous in saying this is a price they cannot refuse.”

Family control is perpetuated by a dual-share structure found in many media companies, including News Corp.

The Bancrofts are descended from Jane Bancroft, who inherited The Wall Street Journal from Clarence Barron. Barron acquired the daily in 1902 and the shareholding has been gradually dispersed among family members.

The rationale for a tie-up is about boosting News Corp’s presence in business information, but there is also speculation about developing the Journal into a broader-interest right-of-centre national newspaper to take on The New York Times.

Treading the boards

The Bancroft family members and their legal adviser who sit on the Dow Jones board of directors

Christopher Bancroft, 55, owner of the private investment firm Bancroft Operations. A director since 1996

Leslie Hill, 53, retired airline captain at American Airlines. A director since 1997

Elizabeth Steele, 58, president of the redevelopment company Main Street Landing LLC. A director since 2001

Michael B Elefante, 63, partner at the law firm Hemenway & Barnes and legal adviser to the Bancroft family. A director since 2005

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