Published On: Thu, Feb 5th, 2015

Saudi Arabia’s Kingdom Holding Sells Majority of Stake in Murdoch’s News Corp

Rupert Murdoch

Kingdom Holding, a Saudi Arabian investment firm owned by billionaire Prince Alwaleed bin Talal, said that it has sold most of its stake in Rupert Murdoch’s News Corp as part of a portfolio review, Reuters said.

The sale of a 5.6% stake in News Corp generated 705 million riyals ($188 million) of cash for Kingdom and leaves it with a 1% holding, according to a bourse statement. The amount of profit or loss booked on the investment was not disclosed, the report said.

Kingdom has held a stake in Murdoch’s media conglomerate since 1997, according to its website.

The sale may embolden dissident shareholders to challenge Murdoch’s grip on the media company, the Financial Times said.

It has been a turbulent few years for the media company, after it emerged in 2011 that one of its British tabloid newspapers, the now-defunct News of the World, had been hacking phones and bribing public officials, according to Reuters.

News Corp said on Tuesday it would face no charges in the U.S. over the matter, although it still faces multiple investigations and court cases in Britain, Reuters said.

“We remain firm believers in News Corp’s competent management, led by chief executive Robert Thomson, and are fully supportive of Rupert Murdoch and his family, ” Alwaleed said in a separate e-mailed statement. The action would not impact on Kingdom’s 6.6% holding of Twenty-First Century Fox, the statement added.

The Murdoch family has 39.4 per cent of the voting power at News Corp, even though it owns only 14 per cent of the company, which means it has had to rely on supporters such as Prince Alwaleed in tightly contested shareholder votes, the Times said.

Both News Corp and Twenty-First Century Fox were part of the same company until they were spun off into separate listed entities in June 2013, representing the previous firm’s publishing and broadcasting businesses respectively, according to Reuters.

The sale of shares by Kingdom was “predominantly executed” in the first half of 2014 and finalized by the end of the year, the statement said.

News Corp hit its highest level since the stock was split on March 5, 2014, when it traded intraday at $18.53, and was as high as $18.29 on July 24 before slipping to an intraday low of $14.28 on October 16, according to Thomson Reuters data.

The media firm, which is due to report second-quarter earnings on Friday, closed on Tuesday at $15.61, Reuters said.

 

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