TCI Scoops Up Battered News Corp. Shares

Nov 16 2011 | 10:45am ET

One of the most prominent activist hedge funds in the world has made itself one of the largest shareholders of scandal-scarred News Corp.

The Children's Investment Fund bought up 53.8 million shares of Rupert Murdoch's media empire in the third quarter, three months that saw the powerful company brought low by a telephone-hacking scandal in the U.K. that led to the closure of one of its most popular tabloids, the News of the World, and has resulted in 17 arrests to date. Shares in News Corp. fell by 13% during the quarter. The uproar also forced News Corp. to abandon its plan to take full control of British Sky Broadcasting Group.

London-based TCI's stake in the company is valued at more than US$800 million.

But TCI isn't the only hedge fund trying to take advantage of News Corp.'s difficulties. Eton Park Capital Management bought 25.9 million shares, Paulson & Co. 14.7 million shares, Elliott Management 9 million shares. Two other hedge funds, Lone Pine Capital and Maverick Capital Management, both added to their already substantial News Corp. stakes, with the former buying 4.7 million shares to take its stake to 26.5 million shares, and the latter buying 2.5 million shares to bring its stake to 10.4 million shares.

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