Warning of conflicts of interest within the Murdoch family, a U.K. hedge fund with $5.3 billion in 21st Century Fox stock told 87-year-old Rupert Murdoch to disregard huge personal tax issues in the sale of Fox assets and consider Comcast Corp.’s potential cash offer, reports philly.com.
“The personal tax position of the Murdoch family must be an irrelevant consideration for the board, in order for the board to comply with their fiduciary duties,” wrote Sir Christopher Hohn, managing director of the Children’s Investment Fund, or TCI, in a May 23 “Dear Rupert” letter obtained by the Inquirer and Daily News.
TCI owns 137 million Fox shares.
Hohn’s letter signals a looming takeover battle that could pit those who like the Walt Disney Co.’s tax-free stock deal — the Murdoch family and other long-term shareholders — against institutional investors such as pension funds and charities that would like to see a higher deal and cash from Comcast. These institutions may not face the same tax liability.
Fox had no comment on Friday. A company spokesman cited a comment by Lachlan Murdoch, Fox’s executive chairman and Rupert’s son, who in a recent conference call with analysts said that Fox’s board of directors was aware of their “fiduciary duties on behalf of all shareholders.” The Murdoch family trusts own 306 million Fox shares.
Rupert Murdoch, who built up 21st Century Fox for decades, agreed in late 2017 to sell a portfolio of Fox’s entertainment businesses, including its movie studio, regional sports networks, and Sky satellite-TV business, to Disney for $52.4 billion in stock.
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