In a recent development, activist investor Starboard Value has taken steps to dissolve News Corp’s dual-class share structure. This move is seen as a direct challenge to the Murdoch family’s control over the Wall Street Journal parent company. It has been reported by sources familiar with the matter that Starboard Value made this push through a non-binding shareholder resolution. As of September, Rupert Murdoch held control over approximately 40% of the company’s voting stock, solidifying the family’s control over News Corp.
It is worth noting that Starboard Value owns roughly 2% of News Corp’s Class A shares, according to FactSet data. This indicates that the activist investor has a relatively small stake in the company but is still taking significant steps to influence its direction. Managing member Jeff Smith previously stated in an interview with CNBC that the firm was advocating for News Corp to spin out its real estate assets, including its interest in the REA Group of Australia.
At the same time, Rupert Murdoch is facing a legal battle to secure his son Lachlan Murdoch’s control over the family trust that holds the News Corp stake. This ongoing legal dispute has been extensively covered by prominent news outlets such as The New York Times and The Wall Street Journal. Rupert Murdoch, aged 93, recently stepped down as chair of the board at both News Corp and Fox Corp, assuming the role of chair emeritus at each company. His son, Lachlan Murdoch, has taken over as the sole chair of News Corp and continues to serve as the executive chair and CEO of Fox Corp.
Market Response
Following the news of Starboard Value’s efforts to dissolve News Corp’s dual-class share structure, the company’s shares experienced a slight decline of about 1%. However, there was a marginal increase in share value when Reuters first reported on Starboard’s actions. It is important to note that Starboard Value has a history of mounting campaigns at various companies, including Autodesk, Match Group, and Salesforce. News Corp, aside from its ownership of the Wall Street Journal, also boasts ownership of The Sun and publisher HarperCollins.