Starboard Value Pushes for Governance Overhaul at News Corp

Hedge fund Starboard Value filed a shareholder resolution to remove the dual-class share structure at News Corp, which enables Rupert Murdoch to control the company. Starboard argues the structure is inappropriate for a public company and lowers its valuation. News Corp defends the current structure, citing stability and strategic gains.

Hedge fund Starboard Value confirmed on Monday that it had submitted a shareholder resolution aiming to dismantle the dual-class share structure of News Corp, which allows Rupert Murdoch to exert significant control over the company.

This action follows a Reuters report revealing Starboard's plans to abolish the stock structure, which grants Murdoch 40% of the voting rights despite holding only a 14% equity stake. Starboard criticized the governance system, arguing it depreciates News Corp's true value.

News Corp countered by stating that the dual-class structure has been crucial for its revenue transformation and strategic acquisitions, contributing to long-term outperformance. Starboard warned News Corp's board to heed their concerns or face further action. This development comes amid Murdoch's legal battle to secure his son Lachlan's succession over News Corp and Fox Corp after his passing.

(With inputs from agencies.)