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21st Century Fox: ValueAct Capital's latest target

As we sent to Activist Strategy subs yesterday, ValueAct Capital has gone active on 21st Century Fox. It owned 30.3 million Class B Fox shares at the end of March. Since then, it’s been buying up more Fox shares. As of May 18th it owns 43.5 million, or 5.5%, of Class B shares and is officially active at the media empire.

ValueAct’s thoughts are vague, with the language being that it plans to “...routinely monitor the Issuer’s operations, prospects, business development, management, competitive and strategic matters, capital structure, and prevailing market conditions...”

and “...may discuss such matters with management or directors of the Issuer, other shareholders, industry analysts, existing or potential strategic partners or competitors, investment and financing professionals, sources of credit and other investors.”

On a pro forma basis, this puts Fox as ValueAct’s seventh largest holding.

Basis of ValueAct position in Fox (our take)

  1. Capital returns story

  2. Market discount due to succession

  3. Ubben sees 50% upside

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