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Rupert Murdoch Loses Key Ally as Prince Alwaleed Sells Fox Stake

Rupert Murdoch Loses Key Ally as Prince Alwaleed Sells Fox Stake
Saudi Prince Alwaleed bin Talal (AP)

Thursday, 09 November 2017 09:48 AM

Rupert Murdoch has lost a major ally after Saudi Prince Alwaleed bin Talal sold his remaining stake in 21st Century Fox Inc.

Alwaleed, who was arrested by Saudi authorities over the weekend as part of an anti-corruption crackdown, had been a shareholder of Murdoch companies for about 20 years. The holding, listed at just under 5 percent of Fox voting shares in the third quarter, has fallen to zero.

Murdoch has long counted on Alwaleed’s support when challenged over his grip on companies in his media empire. The Saudi billionaire acquired a stake in Murdoch’s News Corp., Fox’s predecessor, in 1997 and publicly backed the Murdoch family’s running of the company amid phone-hacking revelations in 2011.

Alwalweed was one of the top holders of Fox’s Class B shares, which carry voting rights. He dramatically reduced his holding in Murdoch’s News Corp. publishing company almost three years ago and has since exited the stock.

Australian news outlet Crikey reported earlier that Fox confirmed the Bloomberg data, showing Alwaleed had offloaded his entire stake in the company. A representative from Fox declined to comment.

Murdoch faces a fresh attack over control next week, with Fox shareholder the Nathan Cummings Foundation proposing to eliminate the company’s dual-class stock structure. That structure gives Murdoch almost 40 percent of the voting power at the company despite only owning about a 17 percent financial stake.

Investors will decide on the non-binding measure at Fox’s annual meeting on Nov. 15. The NCF has unsuccessfully pursued a similar change at News Corp. for several years and proposed such a change at Fox in 2013.

Murdoch may overcome the latest challenge without Alwaleed’s vote, by counting on other supporters including activist investor Jeffrey Ubben. Ubben, whose ValueAct Capital Management began amassing Fox stock in 2014, was made a Fox director the following year in a standstill agreement that prevents him from starting a proxy fight or publicly criticizing Fox, among other conditions.

The Murdoch Family Trust and ValueAct together hold 45 percent of the Fox Class B voting shares.

Walt Disney Co. has held talks to acquire assets from 21st Century Fox, including its 39 percent stake in European pay-TV provider Sky Plc, a person familiar with the matter said this week. Fox’s bid to take over the rest of Sky is under review by regulators in the U.K.

Alwaleed is among the 11 princes, four ministers and dozens of current or former senior officials arrested on orders from a newly established anti-corruption committee headed by Crown Prince Mohammed bin Salman, said a senior Saudi official who spoke on condition of anonymity.

The wealthiest of the arrestees, Alwaleed was picked up from his desert camp, the official said. Authorities didn’t disclose the allegations that prompted the action.

Despite his being the 50th-richest person in the world, with a $19 billion fortune according to the Bloomberg Billionaires Index, details on the source of Alwaleed’s wealth must be gleaned from his public statements, the website of his holding company and company filings. Often his transactions and assets are disguised by investing through funds that obscure the ultimate beneficiary.

Known internationally for investments in companies including Citigroup Inc. and Apple Inc., Alwaleed, 62, hasn’t hesitated to flaunt his wealth. He bought his own A380 superjumbo jet in 2007, planning to kit it out as a “flying palace.” He also launched legal action against Forbes magazine for undervaluing his worth in 2013, before settling the case in 2015. He was a vocal critic of Donald Trump during the U.S. presidential election last year. He later sold the A380 before taking ownership of it, and sought to reconcile with Trump after he was elected president.

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Rupert Murdoch has lost a major ally after Saudi Prince Alwaleed bin Talal sold his remaining stake in 21st Century Fox Inc.Alwaleed, who was arrested by Saudi authorities over the weekend as part of an anti-corruption crackdown, had been a shareholder of Murdoch companies...
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2017-48-09
Thursday, 09 November 2017 09:48 AM
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