The Murdoch clan has a new best friend in the voting shares in 21st Century Fox after San Francisco hedge fund and activist investor, ValueAct, picked up 30 million of the securities for around $US1 billion. That’s a stake of around 15%, making the fund the second largest holder of the voting shares in Fox.
The investment was confirmed in an interview on CNBC with the fund’s founder, Jeffrey Ubben. The fact that the fund bought voting shares means Mr Ubben is a ‘friend’ by the Murdochs, who make it clear to big buyers of the voting shares of their displeasure if the buyer is perceived as possibly hostile.
Other big holders of the voting shares include Prince Alwaleed of Saudi Arabia (around 6%) and US value investment group, Southeastern Asset Management which has around 23.8 million shares, or 12%.
The Murdochs control Fox (and News Corp) through their stake of 39% of the voting shares in both companies (including Rupert Murdoch’s 1% stake).
ValueAct says it bought the shares after they dropped 11% in the wake of the bid for Time Warner, which was terminated last week. Southeastern bought its shares last year, after the split in the Murdoch empire on June 28, 2013.
The Murdochs, ValueAct, Southeastern and Prince Alwaleed control around 72% of 21st Century Fox. Mr Obben says he supports the current management of Fox
"We support (Fox’s) stand-alone plan and (believe) that it would drive the stock higher," ValueAct Chief Executive Jeffrey Ubben said in an the CNBC interview on Monday, adding that he sees Fox as a $50 stock in three years, Reuters reported. ValueAct has around $US14 billion under management. But Bloomberg pointed out that ValueAct has a history of shareholder activism as some leading US companies.
"ValueAct, which manages about $14 billion, helped change the direction of companies from Microsoft Corp. and Valeant Pharmaceuticals International Inc. to Sara Lee Corp. Last year, the firm helped get industrial equipment maker Gardner Denver Inc. to sell itself to KKR & Co. In 2012, it attained board seats with Adobe Systems Inc. and Motorola Solutions Inc," Bloomberg said.
So friend or foe? Who knows, but if Fox should every drift off course….
