Southeastern buys 12% stake in News Corp, giving it largest holding behind Murdoch
SOUTHEASTERN Asset Management, the investment firm that joined Carl Icahn in opposing Dell’s buyout, has acquired a 12% voting stake in News Corporation, the largest holding behind chairman Rupert Murdoch.
The 23.8-million share class B stake, disclosed in a regulatory filing on Tuesday, is valued at about $397m, based on a closing price of $16.72. The investment accounts for about a 4.1% economic interest in New York-based News Corporation, the publishing business split off in June from Mr Murdoch’s film and TV division.
Southeastern, led by chairman and CEO Mason Hawkins, has no plans to influence News Corporation, according to the filing. The investment company, based in Memphis, Tennessee, is known for value investing, although it has occasionally tried to sway management. Mr Hawkins and Mr Icahn dropped their opposition this week to Michael Dell’s $24.9bn plan to buy out Dell.
Neither Southeastern nor News Corporation would comment on the acquisition. The New York-based company owns the Wall Street Journal and the New York Post, among other titles.
Southeastern, founded in 1975, is an independent advisory firm with $32.9bn under management as of June 30, according to the company’s website.
The company, which manages Longleaf Partner Funds, generally takes large stakes in “competitively entrenched, well-managed businesses purchased at steep discounts to their intrinsic values”.
Its biggest holdings at the end of the second quarter included Chesapeake Energy, holding com- pany Loews, delivery firm FedEx, and satellite broadcaster DirecTV. Mr Murdoch split his two media companies after a hacking scandal at its UK newspaper unit.
News Corporation shut down the weekly News of the World and Mr Murdoch and his son, James, who oversaw the division, testified before parliament in 2011 about the company’s response to revelations that reporters accessed voice mail accounts, including that of a murdered school girl Milly Dowler.
In July, Mr Murdoch agreed to testify to parliament a second time. British MPs asked for Mr Murdoch to be recalled after the transcript of a tape was published by Exaro News, in which Mr Murdoch told reporters at the Sun newspaper that bribery had been a routine practice.
The scandal intensified concerns among some shareholders about News Corporation’s governance. Proposals to separate the chairman and CEO titles held by Mr Murdoch and to eliminate the dual-class stock system that allows him and his family to retain control drew opposition at the annual general meeting last October.
Investors excluding family holdings voted in support of the two measures, even as Mr Murdoch pressed forward with a plan to split the company.
Mr Murdoch holds 39% of News Corporation’s voting stock, or a 14% economic interest. Saudi Prince Alwaleed Bin Talal owns 6.6% of the voting shares, data show, and supported him through the hacking episode. Southeastern previously teamed with Mr Icahn in a shareholder revolt at Chesapeake Energy. Mr Hawkins also joined with investors advocating for a sale of Knight Ridder in 2005.