By Andrew Edgecliffe-Johnson in New York
Rupert Murdoch has sold most of his non-voting shares in News Corp in an estate-planning move that will not reduce his influence over his media group but which reverses purchases made in February that were portrayed as a signal of his confidence in the company’s future.
News Corp declined to comment, but two people familiar with the move said the sales were made for routine estate planning purposes. The 80-year-old chairman and chief executive sold 3.63m class A shares at prices between $16.60 and $17.26, the company said in a Securities and Exchange Commission filing, for a total of $61.7m.
Mr Murdoch retains a small $6.2m block of 361,000 non-voting A shares and his 38.4 per cent family block of B shares, which carry the voting rights that shielded Mr Murdoch, his sons James and Lachlan and other directors from a record protest vote by independent shareholders at News Corp’s annual meeting in October.
Mr Murdoch has traded in and out of the non-voting A shares over the years, most notably distributing stakes worth $100m to each of his children in 2007. But his purchases of 4m A shares in February, at similar prices, were his first big stock purchases for five years, and described by the company at a time as “a sign of his belief in the future of the company”.
The sales, made in the last few days, come after the announcement of a $5bn share buy-back plan has helped News Corp’s stock to recover most of the ground it lost since the News of the World tabloid phone hacking scandal first hit most investors’ radars in July.
The shares, which were trading above $18 at the start of July, fell as low as $13.38, but have rallied to close at $16.32 on Friday after repurchases by News Corp, which had long been seen as averse to spending cash on its own stock. The group has so far spent almost $2.2bn under the buy-back programme.
John Paulson, the hedge fund manager, this week disclosed that he held a 1.8 per cent stake in News Corp’s B shares as of the end of September, valued at almost $250m. The stake makes Mr Paulson the third-largest holder of voting rights behind Mr Murdoch’s family and Prince Alwaleed bin Talal, the Saudi investor, who controls a 7 per cent stake.
In contrast to 2007, Mr Murdoch’s children are not expected to receive any proceeds of the latest disposals..
? The Financial Times Limited 2011