The Morning Brief: ValueAct’s Ubben to Join 21st Century Fox Board

Twenty-First Century Fox is the latest large company to work out a settlement with an activist investor. The entertainment giant announced it will nominate Jeffrey Ubben of ValueAct Capital to its board of directors at its upcoming annual meeting. To make room, the company is expanding its board from 12 to 13 directors.

“Jeff will bring to our Board a great perspective as a global investor and a shared belief in building long-term value for shareholders,” state executive chairmen Rupert Murdoch and Lachlan Murdoch in a press release. “Our Board and senior management team have developed a highly-valued relationship with Jeff.”

For his part, Ubben, whose San Francisco firm now manages more than $19 billion, states: “I have been extremely impressed with 21st Century Fox’s senior leadership team and directors and their collective vision for the Company’s continued growth in a dynamic industry. The rapidly changing media landscape presents significant opportunities, and I believe 21st Century Fox is uniquely positioned to leverage its global presence and market leadership.”

As part of a so-called standstill agreement, ValueAct essentially agreed not to engage in any sort of activist activity, examples of which 21st Century lays out in a regulatory filing. The hedge fund firm, which owns 5.9 percent of the company’s shares, promises not to build its stake to 7 percent or more or sell some or all of its position to another firm that would then wind up with at least 5 percent of the stock.

The stock climbed more than 2 percent on Tuesday after the news broke. However, it is still down nearly 25 percent since ValueAct disclosed its stake in mid-May. Ubben is a director of Willis Group Holdings; he is a former chairman and director of Martha Stewart Living Omnimedia and a former director of Catalina Marketing Corp., Gartner Group, Mentor Corporation, Misys Sara Lee Corp., and Valeant Pharmaceuticals International, among other companies.


Tiger Global Management is among a number of investors to participate in the $125 million Series E financing of Thumbtack, an online firm that matches professional service providers with consumers. This is the New York investment firm’s third investment in the private, San Francisco-based company.


Stephen Mandel Jr.’s Greenwich, Connecticut-based Lone Pine Capital boosted its stake in Cheniere Energy to 5.2 percent. The disclosure came at the same time that Carl Icahn’s New York-based Icahn Capital disclosed that it increased its position to 11.43 percent of the liquefied natural gas company.


Stifel Nicolaus cut its price target on hedge fund favorite Micron Technology from $34 to $23 but maintained its Buy rating. Even so, shares of the semiconductor maker climbed 2.3 percent to close at $14.39. In a note to clients, Stifel points out that personal computer DRAM spot prices have declined by 40 percent year-over-year.

“This is the longest period and most dramatic decline in PC DRAM prices since November 2010 through November 2011,” the investment bank states in a note to clients. “Though PC DRAM prices have yet to stabilize, we believe the remaining PC DRAM manufacturers are making the proper decisions by continuing to adjust output to match the lack of a rebound in PC demand.”


Another popular hedge fund holding, renewable energy company SunEdison, continued its free-fall, dropping another 4.5 percent or so to close at $6.66. Yikes! It has been a large holding of David Einhorn’s Greenlight Capital.


Mining and trading giant Glencore rebounded somewhat, gaining nearly 17 percent on Tuesday. Hedge fund firms Lansdowne Partners and Passport Capital are reportedly short the company.