(Reuters) -Hedge fund Starboard Value confirmed on Monday that it has filed a shareholder resolution to eliminate the dual-class share structure that gives Rupert Murdoch control of News Corp (NASDAQ:), the publisher of the Wall Street Journal.
Starboard announced its move just days after Reuters exclusively reported that it had tabled the proposal to abolish the share structure, which would give Murdoch 40% of News Corp’s voting shares despite owning an equity stake of about 14%.
“This is clearly not the right governance structure for a publicly traded company, and we believe it has exacerbated News Corp’s valuation discount to its inherent value,” the hedge fund said in a statement.
It says there is no reason to extend super voting rights to Murdoch’s children and that this has hit News Corp shares.
News Corp disagrees, saying the company is thriving under the current structure, which allows the company to transform revenue and profits amid digital reinvestment, strategic acquisitions and divestitures.
The “dual-class capital structure promotes stability and has enabled the successful implementation of News Corp’s transformational strategy and long-term outperformance for all News Corp shareholders,” the company said in a statement on Monday.
Starboard said it will provide more information in the coming weeks and warned News Corp’s board to listen to concerns about its structure.
“If the board refuses to listen, we may take further action,” Starboard added.
Starboard’s move comes as 93-year-old media mogul Murdoch is embroiled in a legal dispute with some of his children to ensure his son Lachlan takes control of News Corp and broadcasting giant Fox Corp after his death.
News Corp said last month it was considering options for Foxtel, the Australia-based subscription TV provider, in response to interest from a third party.
