Investors push McGraw-Hill for changes

Mon Aug 1, 2011 9:05pm EDT
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Joe Rauch

CHARLOTTE, North Carolina (Reuters) - A Canadian teacher's pension fund and a New York hedge fund are pushing McGraw-Hill Cos Inc MHP.N to boost its market value and might agitate for steps such as breaking off parts of the company.

The Ontario Teachers' Pension Fund and JANA Partners LLC said in a securities filing on Monday that they bought 5.2 percent of the shares of the New York-based company, which produces textbooks and trade publications, runs nine television stations and owns ratings agency Standard & Poor's.

McGraw-Hill said in June it was reviewing its disparate businesses to make sure they made sense for the company and decided to sell off its broadcasting group.

Analysts said the move increases pressure on McGraw-Hill's management.

"This is a kick in the pants," said Jason Ware, an equity analyst with Salt Lake City-based Albion Financial Group. "It brings a little higher sense of urgency."

JANA said in its filing it had discussions with McGraw-Hill about the company's operations, strategy and future plans, Both investors said they might have more discussions along those lines with the company.

Analysts said the company's educational unit -- which makes textbooks -- has been a drag on overall earnings, while ratings agency Standard & Poor's has been one of McGraw-Hill's bright spots.

Peter Appert, a Piper Jaffray & Co analyst, said McGraw-Hill's disparate businesses could be worth as much as $52 per share if valued separately. McGraw-Hill's stock closed on Monday at $41.41 per share, down 0.46 percent, or 19 cents.   Continued...