LawFuel – The Law & Businesswire – While Dow Jones evaluates Rupert Murdoch’s $5 billion takeover offer for the group, lawyers claim it could face a flood of lawsuits if it rejects the bid and its stock price plummets.
Dow Jones & Co Inc.could face a flood of shareholder lawsuits if it rejects a buyout bid from Rupert Murdoch and its shares tumble, legal and governance experts said on Wednesday.
Dow Jones, publisher of the Wall Street Journal, has said it is evaluating the $5 billion takeover bid from Murdoch’s News Corp. a proposal that triggered a nearly 55 percent jump in its stock price on Tuesday.
But a representative of the publisher’s controlling shareholders, the Bancroft family, said they would oppose it.
If the board ultimately rejects the offer — and no comparable bids emerge — lawsuits almost surely will be filed accusing the directors for failing to look after investors’ interests, said Thomas Dewey, a partner at law firm Dewey Pegno & Kramarsky.
“There is a substantial litigation risk,” said Dewey, who specializes in governance and securities law matters. “As a practical matter, it will be difficult for them (the board of directors) not to deal with Mr. Murdoch, both from a legal perspective and a market perspective.”List your legal jobs on the LawFuel Network