Ubben Becomes Top Inside Buyer in Trump Rally With Fox Purchasesby
ValueAct chief adds to Fox stake as election bolsters markets
Firm is second-largest holder in media giant after Murdochs
Investor Jeffrey Ubben has impeccable timing with 21st Century Fox Inc. stock.
Ubben acquired 3 million of the media giant’s Class B shares in December for $83.4 million. That made him the biggest insider buyer of stock in the Russell 3000 Index since Donald Trump was elected on Nov. 8, according to data compiled by Bloomberg.
The purchase by Ubben for his ValueAct Capital Management came as several events were starting to lift Fox shares. Trump’s win inspired a stock rally and the political season was bolstering the Fox cable network’s ratings and advertising revenue. The company also was weighing a $14 billion deal to consolidate its TV empire with Sky Plc.
This was opportune for Ubben, who also bought 3 million Fox shares in August. Since ValueAct’s purchases in December, Fox has returned 8.3 percent through Feb. 14, more than double the S&P 500’s gain in that period. The shares are up 15 percent since the firm’s August buys.
Not bad since for most of 2016, shares in the company controlled by Rupert Murdoch and his sons languished. They were flat this year through the U.S. election day.
Ubben was a proponent of the Sky transaction, according to a person with knowledge of the matter, who asked not to be named. The prospect of the deal helped push the shares up by putting to rest concern about what Fox would do with its capital.
Spokesmen for Fox and Ubben declined to comment.
Fox News has been the ratings front-runner among cable networks in the 13 weeks since the election. From when the first polls closed until Trump’s victory speech at around 3 a.m. New York time, the network had a historic high audience averaging 12.2 million viewers, according to Nielsen ratings. The company’s second-quarter profit exceeded analysts’ estimates as Fox benefited from political ads and baseball’s World Series.
Ubben is no doubt a Fox fan. Over the past two years, his ValueAct Capital has taken a $1.6 billion stake in the company and became the second-biggest holder of the B shares after the Murdochs. Ubben also joined the board.
In September 2015, ValueAct entered into an agreement with Fox not to collect more than 7 percent of its Class A or B shares, not to criticize the company or start a proxy fight. He also agreed to resign as a director should ValueAct’s ownership drop below 5 percent. ValueAct currently has a 6.7 percent stake.
Ubben’s December Fox investment is about four times more than the second largest purchaser in the Russell 3000: Fredric Eshelman, chairman of biotech firm Medicines Co. Over a three day span ending Dec. 8, Eshelman purchased shares worth $21 million. The stock is up more than 55 percent since then.