Rupert Murdoch’s transition of power at News Corp. to his son Lachlan is being challenged by a major shareholder in the media company.
Hedge fund Starboard Value went public with a letter addressed to shareholders of the newspaper giant, owner of The Wall Street Journal and New York Post, calling on the company to eliminate its dual-class share structure and referencing a brewing Murdoch family standoff.
“This transition of power from Rupert Murdoch to his children has allowed for complicated family
dynamics to potentially impact the stability and strategic direction of News Corp,” read the letter signed by Starboard’s Jeffrey C. Smith. “For background, the Murdoch family’s ownership in News Corp is managed by the Murdoch Family Trust … which is reportedly controlled by Rupert Murdoch and four of his children. Recent press reports have described a legal battle over ongoing control of the Trust, with Rupert and Lachlan Murdoch on one side, and three of Rupert Murdoch’s other children on the other side.”
Smith added, “We believe, and reports have highlighted, that one of the root causes for the conflict is disagreement over the future strategic direction of News Corp and Fox Corporation. This uncertainty represents a risk to shareholders that is only amplified by the Murdoch family’s super-voting shares and the poor governance and oversight that stems from the dual-class share structure.”
More to come.
