Activist investor Starboard Value, which has built a position in News Corp., wants the Murdoch-family controlled media giant to separate its Australian real estate business.
News Corp. is “significantly undervalued” and unloading its 61% stake in REA Group Ltd. could help unlock more than $7 billion for shareholders, Starboard said in an investor presentation on Tuesday.
Doing so would also highlight the value of News Corp.’s other assets, including Dow Jones, Harper Collins, the New York Post and Foxtel, Starboard said at the 13D Monitor Active-Passive Investor Summit in New York. Dow Jones alone would be worth more than $7 billion if it were valued at a similar multiple as the New York Times Co., according to Starboard, as it is more profitable and has a greater subscription mix.
“We believe News Corp.’s collection of assets is worth over $33 per share,” Starboard said. “Even when using conservative assumptions, News Corp. has an opportunity to create significant shareholder value through a separation of certain assets.”
News Corp. rose 1.1% to $22.13 at 11:15 a.m. in New York trading Tuesday, giving the company a market value of $12.8 billion. The stock has gained about 37% in the past year.
“We have always maintained an active and engaged dialogue with our investors and are committed to driving shareholder value,” a representative for News Corp. said in a statement. “We remain focused on executing our strategic plan, which has helped us set records in profitability over the past three years. We are proud of our rapid digital transformation and bright prospects for long-term growth and value creation.”
News Corp. is in a transitional phase after founder Rupert Murdoch announced plans to step down as chairman of the company and Fox Corp.
This year, the Murdochs gave up on an effort to combine their two companies after News Corp. investors complained a merger might undervalue their businesses.
