Hedge fund tightens grip on News Corp
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.
Frequently Asked Questions about this Article…
Southeastern Asset Management acquired a 12 per cent voting stake in News Corp by buying 23.8 million Class B shares. The transaction was valued at about US$397 million (around $428 million) and represents roughly a 4.1 per cent economic interest in the company.
Southeastern Asset Management is a Memphis‑based investment company with about US$33 billion under management, led by chairman and CEO O. Mason Hawkins. According to a US regulatory filing cited in the article, Southeastern says it has no plans to influence News Corp.
Analysts say a 12 per cent voting stake can be a blocking stake in a potential takeover scenario and often merits greater influence than smaller shareholders. It can be enough to justify a board position and gives the holder more market power, so investors see it as a meaningful level of ownership even if motives are not yet clear.
Rupert Murdoch still holds about 39 per cent of News Corp’s voting stock, so he remains the dominant shareholder. Southeastern’s 12 per cent voting stake makes it the largest shareholder after Murdoch, with Saudi Prince Alwaleed Bin Talal owning about 6.6 per cent.
The article notes that Southeastern has allied with billionaire activist investor Carl Icahn. Southeastern and Icahn have previously worked together in activism — for example, opposing Michael Dell’s US$24.9 billion buyout of Dell’s computing group — although Icahn recently dropped his opposition to that deal.
Following the report of the stake purchase, News Corp shares were reported up 28 cents at $18.01 on Wednesday, indicating a positive near‑term market reaction.
Yes. One unnamed media analyst described it as intriguing that Southeastern bought such a large stake "at the top of the market," describing News Corp shares as at the top end of valuation. Another suggested the move could be aimed at influencing ownership structure in the event of Rupert Murdoch’s death. Overall, analysts said the motives were not yet clear.
Investors should monitor regulatory filings and company announcements for any further disclosures from Southeastern or other large holders. Keep an eye on potential shareholder proposals or discussions about the company’s dual‑class stock structure (a proposal to abolish it was defeated at last year’s annual meeting), and any signs of moves to change board composition or ownership arrangements.
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