Starboard Value, an activist hedge fund led by Jeffrey Smith, has acquired shares of News Corp, potentially signalling future demands for changes within Rupert Murdoch's media empire.
The specifics of Starboard's plans and the extent of its stake in News Corp remain undisclosed. Those with knowledge of the matter have chosen to remain anonymous due to its confidential nature. News Corp has refrained from commenting, and Starboard has not responded to requests for comment.
Upon the news of Starboard's involvement, News Corp's shares initially rose by 1% but later reduced gains, concluding trading at $20.91. Although News Corp's shares have seen a 14% increase year-to-date, they have not kept pace with certain industry peers like the New York Times Co.
Despite efforts to bolster digital revenue and subscriptions, the anticipated returns have not materialized.
Starboard has a history of advocating for changes within various companies, ranging from Salesforce to Darden Restaurants. However, reshaping News Corp could prove challenging without Rupert Murdoch's approval. The Murdoch family trust currently possesses 39% of the company's voting shares, a structure some investors have expressed objections to.
Jeffrey Smith is scheduled to present investment ideas at two upcoming conferences, including the 13D Monitor Active-Passive Investment Summit. Notably, Irenic Capital Management, another activist hedge fund, previously encouraged News Corp to divest its real estate websites and Dow Jones, the publisher of the Wall Street Journal.
Reports from January indicated that News Corp was in discussions to sell its stake in Move, the operator of Realtor.com, to CoStar Group Inc for an estimated $3 billion. Regrettably, these talks ended unsuccessfully in February. Irenic also mobilized investor opposition to Rupert Murdoch's proposed merger with his other company, Fox Corp, leading to the abandonment of the plan.
Starboard began accumulating its News Corp stake during the summer, before Rupert Murdoch's announcement on September 21st that he would step down as chairman. This move left his son, Lachlan, as the sole chairman, according to undisclosed sources.
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