ValueAct injects 1 billion into 21st Century Fox

Hedge fund ValueAct Capital LLC has said it had taken a $1 billion (£595 million) stake in Rupert's Murdoch's 21st Century Fox.

"We support (Fox's) stand-alone plan and (believe) that it would drive the stock higher," ValueAct chief executive Jeffrey Ubben told Reuters yesterday (August 11th), adding that he sees Fox as a $50 stock in three years.

The ValueAct executive noted that he supports Fox's $6 billion share repurchase plan, which was announced last week.

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

Time Warner

This announcement comes weeks after US entertainment group Time Warner rejected an initial takeover approach from 21st Century Fox estimated at $80 billion (£46.6 billion).

Together Fox and Time Warner would have owned a huge range of assets including CNN, Fox News, HBO and movie studios 20th Century Fox and Warner Bros, creating a combined company with total revenues of $65 billion.

Rupert Murdoch's group said it was not currently in talks with Time Warner about pursuing the deal further. 

21st Century Fox currently has more than $5 billion cash on its balance sheet. The company could also potentially add $10 billion more if BSkyB, in which Fox owns a 39 per cent stake, successfully completes a buyout of Fox’s Italian and German pay-TV businesses to create Sky Europe.

ValueAct's new stake will be its fifth largest holding. Jeffrey Ubben said the hedge fund does see a possible Time Warner tie-up down the road.

Twenty-first Century Fox's shares climbed 0.81 per cent to $35.05 today at 10:07 ET in New York.

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