ValueAct takes $1 billion stake in 21st Century Fox

Mon Aug 11, 2014 7:22pm EDT
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By Nadia Damouni and Ronald Grover

(Reuters) - Hedge fund ValueAct Capital LLC said it had taken a $1 billion stake in Rupert Murdoch-controlled film and TV company Twenty-First Century Fox Inc FOXA.O.

Fox withdrew its $80 billion bid to buy Time Warner Inc TWX.N last week after being rebuffed by the owner of CNN, HBO and Warner Bros studios. Murdoch said he has no plans to pursue another company as an alternative.

"We support (Fox's) stand-alone plan and (believe) that it would drive the stock higher," ValueAct Chief Executive Jeffrey Ubben said in an interview on Monday, adding that he sees Fox as a $50 stock in three years.

Fox shares closed up more than 1 percent at $34.77 on Monday. The new stake will be ValueAct's fifth largest holding, Ubben said.

ValueAct, a hedge fund known for taking stakes in companies and quietly affecting change over the long term, does see a possible Time Warner tie-up down the road, Ubben said.

"It is important to the ecosystem," he said, adding Fox should "retain the opportunity later to revisit the deal."

In addition, the ValueAct executive said he supported Fox's $6 billion share repurchase plan, which it also announced last week.

"We thought it was something they should do if they were to walk away, to remind people of their cash flow."   Continued...

A sign is pictured at a vehicle entrance to Fox Studios in Los Angeles, California February 6, 2014.    REUTERS/Jonathan Alcorn