A US hedge fund that has allied with billionaire activist investor Carl Icahn has acquired a 12 per cent voting stake in News Corp, making it the largest shareholder behind the media company's chairman Rupert Murdoch.
Southeastern Asset Management, a Memphis-based $US33 billion investment company, snapped up 23.8 million Class B shares. The transaction is valued at about $US397 million ($428 million).
Overall, the holding accounts for about a 4.1 per cent economic interest in News Corp, the publishing business split off in June from Mr Murdoch's film and television interests.
Southeastern, led by chairman and chief executive O. Mason Hawkins, says it has no plans to influence News Corp, according to a US regulatory filing.
BBY Media analyst Mark McDonnell described the transaction as "a bit startling" and "out of left field". He said the motives behind the acquisition were not clear.
"[A] 12 per cent stake is a blocking stake in a potential takeover scenario and that is a source of market power," he said. "Twelve per cent would often be seen as sufficient to warrant a position on the board and that would also provide scope for a higher level of influence than smaller shareholders. Whether that is the objective here is not known."
Southeastern has occasionally tried to sway management and was allied with activist investor Carl Icahn in opposing Michael Dell's $US24.9 billion plan to buy out the Dell computing group. Mr Icahn dropped his opposition to the deal this week.
Another media analyst, who declined to be named, said it was intriguing that Southeastern bought such a large stake in News at the top of the market. He described News' shares as at the top end of valuation. He said the move could be seen as an attempt to influence the ownership structure of the company in the event of Rupert Murdoch's death.
Mr Murdoch holds about 39 per cent of News Corp's voting stock. Saudi Prince Alwaleed Bin Talal owns 6.6 per cent. Mr Murdoch split his global media empire into two separately listed entities following the phone hacking scandal at its British publishing business. The scandal reignited concerns among some investors about News' management structure.
The proposal to abolish the dual-class stock system that allows the Murdoch family to retain control of the company was defeated at News Corp's annual meeting last October.
News Corp shares were up 28 cents at $18.01 on Wednesday.
The developments came as former News Corp Australia chief executive Kim Williams on Wednesday brushed off accusations of election campaign political bias from the company's news outlets.