ValueAct Builds $1 Billion Stake In Twenty-First Century Fox

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ValueAct Capital Management, the activist hedge fund spearheaded by Jeffrey Ubben acquired a stake in Twenty-First Century Fox Inc (NASDAQ:FOXA) worth around $1 billion, according to reports  CNBC and Bloomberg based on people familiar with the situation.

The sources indicated that ValueAct Capital Management purchased approximately 30 million shares of the Class B voting stock of Twenty-First Century Fox Inc (NASDAQ:FOX). The activist hedge fund held discussions with the management of the media company.

ValueAct Capital Management acquired a stake in the media company on July 16, after a report leaked that the proposal of Twenty-First Century Fox Inc (NASDAQ:FOX) to acquire Time Warner Inc (NYSE:TWX) brought a negative impact on its stock price.

Twenty-First Century Fox abandons Time Warner bid

Earlier this month, Fox chairman Rupert Murdoch announced that his company abandoned its $85 billion takeover bid for Time Warner Inc (NYSE:TWX). Murdoch explained the stock price of Twenty-First Century Fox Inc (NASDAQ:FOX) weakened since making the proposal, which made the deal “unattractive to Fox shareholders.” He also announced a $6 billion shares repurchase program.

Murdoch said, “These factors, coupled with our commitment to be both disciplined in our approach to the combination, and focused on delivering value for the Fox shareholders, has led us to withdraw our offer. He added that Twenty-First Century Fox Inc (NASDAQ:FOX) is a “strategically complete company.”

ValueAct support’s takeover bid withdrawal

ValueAct Capital Management supported the decision of Twenty-First Century Fox Inc (NASDAQ:FOX) in withdrawing its bid to acquire Time Warner Inc (NYSE:TWX), according to one of the persons familiar with the matter. The person estimated that the stock buyback will boost the stock price of the media company by $2.50 per share.

In an interview with Reuters, Ubben said, ValueAct Capital Management “supports the stand-alone plan” of Twenty-First Century Fox Inc (NASDAQ:FOX), and believes it “would drive the stock higher.” He anticipates the stock to reach $50 per share in three years.

The activist hedge fund manager also said he supports the $6 billion repurchase program of Twenty-First Century Fox Inc (NASDAQ:FOX). He said, “We thought it was something they should do if they were to walk away, to remind people of their cash flow.”

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