(Reuters) – Several top investors in Twenty-First Century Fox Inc are pressing for the right to swap their voting shares for ordinary shares, which are trading at an unusual premium, even though the move could hand even more control of the company to Rupert Murdoch, according to people familiar with the matter.
Fox’s dual-class share structure already gives the 83-year-old media mogul control over 39.7 percent of voting rights, even though he and his family hold only a 12 percent equity stake.
Several Fox investors, which collectively own 8 percent of voting rights, have been unhappy about the relative performance of their shares since the company delisted from the Australian stock exchange last May, the people said.
Historically, the voting shares had traded at a premium. In the five years before the delisting, the Class B shares, which carry voting rights, traded at an average premium of 6.2 percent over the ordinary Class A shares. But the delisting caused some Australian institutional funds to sell their B shares, which now trade at a 3 percent discount to the A shares.
Frustrated with the gap, several top Fox shareholders have met with management in recent months to press for amendments to the company’s charter to allow voting shares to be convertible into ordinary shares, according to the people, who requested anonymity as the discussions are private.
They said the investors, which include major hedge funds, believe conversion rights would push up the value of the B shares, pointing to CBS Corp and Comcast Corp as examples. The voting shares of both companies can be converted and they trade at a premium to ordinary shares.
Some of the Fox investors plan to take their proposals to the next annual general meeting, expected in the fall, said the sources familiar with the matter. Changing Fox’s charter would require approval from a majority of shareholders with voting rights.
It is unclear how much support there would be for this campaign. A Fox spokesman declined to comment.
At least two major institutional investors said they had no desire to convert their shares and lose voting rights. Other shareholders may be wary that conversion would leave Murdoch with an even bigger share of the remaining voting shares.
In the past, some pension funds and shareholder proxy advisors have criticized Murdoch’s command over his media empire, and pushed to separate his chairman and chief executive roles, among other things.
Fox, which owns the Twentieth Century Fox film studio as well as broadcast and cable television networks, was spun off from News Corp in 2013 amid shareholder pressure surrounding the phone hacking scandal involving Murdoch’s newspapers in Britain. (News Corp’s voting shares are also not convertible into ordinary shares.)
Following the split, Fox chose to delist from the Australian stock exchange, in part to cut compliance costs and consolidate trading on the Nasdaq to boost liquidity in the U.S. market.
The move forced Australian institutional funds that are not permitted to own foreign-listed securities to wind down their positions in Fox. That process is still going on, and has taken longer than some investors expected, people familiar with the matter said.
Adding to the pressure, the voting shares have not so far been accepted on any S&P Dow Jones indices, whereas the ordinary shares have. S&P Dow Jones said the voting shares will be indexed in September, which would open them up to index mutual funds, exchange traded funds and index portfolios – that could help the voting shares rebalance.
Fox’s ordinary A shares have risen 3.8 percent over the past six months to $33.58, while the voting B shares have gained 2.7 percent to $32.57. The average A share trading volume per day is about 12 million shares, versus the B share volume is 4 million shares. There are 1.4 billion A shares and 800 million B shares.
Some top Fox investors are willing to give up their voting rights because Murdoch already holds a controlling stake, the sources said. Even if Murdoch’s voting rights increase, these funds believe it would not change the way the business is run.
“Once you own the controlling block that he does, the vote is not worth a terrible lot,” said one of the sources.
As for ordinary shareholders, the prospect of convertibility could be an overhang on the common shares, said Eddie Best, a lawyer specializing in capital markets at Mayer Brown LLP.
Class B “shareholders are unlikely to exercise their conversion rights if they don’t have plans to sell,” he said.
As for ordinary shareholders, “they might not love it but they might not have a choice,” Best said.
TRANSCRIPT: Trump’s remarks with tech executives.
On Wednesday, Donald Trump and his advisers met with 13 top tech executives to discuss policy and innovation.
Tim Cook, CEO, Apple Inc.:
“Tim Cook, very good to be here. And I look very forward to talking to the president-elect about the things that we can do to help you achieve some things you want.”
Donald Trump, President-elect:
Safra Catz, co-CEO, Oracle Corp.
“I’m Safra Catz, I’m CEO of Oracle. I’m actually privileged and honored to even be here, and we are looking forward to helping you, and your administration.”
“Thank you. Thank you, Safra.”
Elon Musk, CEO, Tesla Motors Inc. and Space Exploration Technologies Inc.:
“Elon Musk, the CEO of SpaceX and Tesla, building rockets and cars and solar stuff in the U.S. I’m really excited about expanding our manufacturing footprint in the U.S.”
“Gary Cohn, here as the delegate for NEC (National Economic Council), working with the president on driving his economic policy.”
Wilbur Ross, investor, appointed U.S. Commerce Secretary:
“Wilbur Ross, nominee for commerce secretary.”
Stephen Miller, appointed Senior Adviser to the President for Policy:
“Stephen Miller, senior adviser for policy, and everyone thank you for being here.”
Satya Nadella, CEO, Microsoft Corp.:
“Satya Nadella, CEO of Microsoft.”
Ginni Rometty, CEO, International Business Machines Corp.:
Ginni Rometty, the CEO of IBM, and also great to be here to work on that [inaudible] agenda.”
Chuck Robbins, CEO, Cisco Corp.:
“Chuck Robbins, CEO of Cisco. Likewise, everything has been said, we’re happy to be here and happy to help and happy to work with you.”
Steve Bannon, senior counsel and chief strategist of the President-elect:
“Steve Bannon, chief strategist and senior counselor for the President-elect.”
Eric Schmidt, executive chairman, Alphabet Inc.:
“Eric Schmidt, Alphabet/Google, and completely agree with what’s been said.”
Alex Karp, CEO, Palantir Technologies Inc.:
“Alex Karp, CEO of Palantir hoping to help bolster national security and [inaudible].”
Brian Krzanich, CEO of Intel Corp.:
“Brian Krzanich, CEO of Intel.”
Donald Trump, Jr., executive vice president, The Trump Organization:
“Donald Trump, Jr.”
Ivanka Trump, executive vice president, The Trump Organization:
Eric Trump, executive vice president, The Trump Organization:
“Eric Trump, and welcome.”
Brad Smith, president, Microsoft:
“Brad Smith, president of Microsoft, and like Satya [Nadella], please to be here.”
Jeff Bezos, CEO, Amazon.com Inc.:
“Jeff Bezos, Amazon.com. I’m super excited about the possibility that this could be the innovations administration.”
Larry Page, CEO, Alphabet:
“Larry Page, Alphabet and Google, probably the youngest company here.”
“Looks like the youngest person.” [Laughs]
“Really excited to be here.”
Sheryl Sandberg, chief operating officer, Facebook Inc.:
“Sheryl Sandberg, Facebook. Excited to talk about jobs.”
Mike Pence, Vice President-elect:
“Mike Pence, governor of Indiana for a few more days, and Vice President-elect of the United States.”
“Well I just want to thank everybody. This is a truly amazing group of people. I won’t tell you the hundreds of calls we’ve had asking to come to this meeting, and I will say, and I will say Peter was sort of saying, ’No, that company’s too small.’ And these are monster companies. But I want to thank — I want to start by thanking Peter because he saw something very early, maybe before we saw it and of course he’s known for that in a different way. But he’s been so terrific and so outstanding and he got just about the biggest applause at the Republican National Convention. He’s ahead of the curve, and I want to thank you, man, you’re a very special guy.
So I want to add that I’m here to help you folks do well. And you’re doing well right now and I’m honored by the bounce. They’re all talking about the bounce, so right now everybody in this room has to like me at least a little bit, but we’re going to try and have that bounce continue and perhaps even more importantly we want you to keep going with the incredible innovation. There’s nobody like you in the world. In the world, there’s nobody like the people in this room.
And anything we can do to help this go along, and we’re going to be there for you and you’ll call my people, you’ll call me, it doesn’t make any difference, we have no formal chain of command around here. I’m honored to have Gary, the president of Goldman Sachs, left Goldman Sachs to do this, and Wilbur, everybody knows Wilbur, they never call him Wilbur Ross on Wall Street, they just say “Oh, it’s Wilbur.” There’s nobody like him.
And we’re gonna do fair trade deals. We’re going to make it a lot easier for you to trade across borders because of a lot of restrictions, a lot of problems that I think you’ll see. And if you have any ideas on that, that would be, that would be great because there are a lot of border restrictions and a lot of border problems, you probably have less of a problem than some companies, some companies have—you have some problems.”
TRUMP MAKES DEAL: Carrier staying in the US, bringing 1k jobs to Indianapolis.
Just two months prior to holding office, President-Election Donald J. Trump has made a deal with Carrier, bringing 1,000 jobs back to Indianapolis.
“We are pleased to have reached a deal with President-elect Trump & VP-elect Pence to keep close to 1,000 jobs in Indy,” Carrier announced on their official twitter account, “More details soon.”
According to The New York Times, Trump and Vice President-elect Mike Pence, Indiana’s governor, will announce the deal at the Carrier company in Indianapolis on Thursday.
Carrier is a high-tech heating, air-conditioning & refrigeration solution company.
SCROOGLED; MAINSTREAM MEDIA ARE NOT THE ONLY ONES WHO MANIPULATE THE GENERAL PUBLIC
WRITTEN BY: GEORGE LUJACK
Google has recently been exposed for actively altering search recommendations in favor of Hillary Clinton’s campaign, as their search engine directs searchers to positive stories of Clinton, when negative stories about Clinton are queried.
Big businesses, such as Google and Facebook, have joined the mainstream media in subtle and overt manipulation of the American general public to manipulate them, screw them, and steer them in favor of liberal policies and liberal politicians.
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COWGER: Tomi Lahren is not a conservative and supports the genocide of unborn children.
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SCOTUS4 months ago
Judge rules to remove WWI cross memorial, because it symbolizes Christianity.
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Roy Moore accuser worked for Clinton and Obama campaigns. Endorsed opponent Doug Jones.
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