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Exclusive-Activist hedge fund Starboard eyes Rupert Murdoch's News Corp -sources

Published 10/13/2023, 03:59 PM
Updated 10/13/2023, 05:35 PM
© Reuters. FILE PHOTO: A view of the signage outside the News Corporation building, after it was announced that Rupert Murdoch would step down as chairman of News Corp and Fox in favour of his son Lachlan Murdoch, in New York, U.S., September 21, 2023.  REUTERS/Bing

By Svea Herbst-Bayliss

(Reuters) -Starboard Value, the activist hedge fund run by Jeffrey Smith, has bought shares of News Corp (NASDAQ:NWSA), according to people familiar with the matter, a move that could presage new calls from investors for changes to Rupert Murdoch's media empire.

The fund's plans and the size of its stake in News Corp could not be learned.

The sources requested anonymity because the matter is confidential. News Corp declined to comment and Starboard did not respond to a request for comment.

News Corp's shares rose 1% on the Starboard news before trimming gains and ending trading at $20.91.

News Corp's shares are up 14% year-to-date but have underperformed some peers like New York Times Co. Its bets to boost digital revenue and subscriptions have yet to fully pay off.

Starboard, which has pushed for changes at companies ranging from Salesforce (NYSE:CRM) to Darden Restaurants (NYSE:DRI), would struggle to shake up News Corp without Murdoch's consent. The Murdoch family trust controls 39% of the company's voting shares, a set-up several investors said they object to.

Smith will present investment ideas at two conferences next week, including the 13D Monitor Active-Passive Investment Summit.

Irenic Capital Management, another activist hedge fund last year pushed News Corp to spin off its real estate websites and Dow Jones, the publisher of the Wall Street Journal.

Sources told Reuters in January that News Corp was in talks to sell its stake in Move, operator of the Realtor.com website, to CoStar Group (NASDAQ:CSGP) Inc for about $3 billion. CoStar, owner of Apartments.com, said in February the deal talks ended unsuccessfully.

© Reuters. FILE PHOTO: A view of the signage outside the News Corporation building, after it was announced that Rupert Murdoch would step down as chairman of News Corp and Fox in favour of his son Lachlan Murdoch, in New York, U.S., September 21, 2023.  REUTERS/Bing Guan/File Photo

Irenic also drummed up investor opposition to Murdoch's proposed merger with his other company Fox Corp, forcing him to abandon the plan.

Starboard began building a stake in News Corp over the summer, before Murdoch, 92, announced on Sept 21 that he would step down as chairman, leaving his son Lachlan as sole chair, the sources said.

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