DIS Walt Disney Co

By David Benoit and Ben Dummett 

London-based activist investor Chris Hohn has built a roughly $3 billion stake in 21st Century Fox Inc., a position that makes him one of the largest holders of a media company at the center of a global takeover battle, according to people familiar with the matter.

The investment places Mr. Hohn's firm, TCI Fund Management, among Fox's six largest shareholders, with more than 4% of the company's shares.

Mr. Hohn declined to comment on his stake in Fox.

The investor's intentions aren't clear, but his holding could wield significant influence in any deal vote by Fox investors. Fox has agreed to a $52.4 billion sale of its entertainment assets to Walt Disney Co., and has disclosed that it rejected a higher Comcast Corp. bid due to regulatory risk concerns.

Comcast is considering whether to urge investors to go with its offer instead, The Wall Street Journal reported earlier Wednesday. The assets in the Disney-Fox deal, which is expected to come to a shareholder vote this summer, include the Twentieth Century Fox studio, cable networks and international properties.

Separately, Fox has been pursuing a purchase of the 61% of European pay-TV operator Sky PLC it doesn't already own. It is butting heads with Comcast on that front as well. The cable giant on Wednesday made official a $31 billion bid for Sky, topping Fox's offer.

Mr. Hohn's TCI had held about 0.7% of Fox's class A shares and a small amount of Class B shares at the end of 2017, but has been adding to the stake, people familiar with the situation said. TCI's next disclosure of its holdings likely would come in a May filing.

TCI doesn't take activist actions in all of its investments, and a bet on Fox could be a simple wager that its assets will be the focus of a bidding war -- or that its future as a slimmed-down company is bright.

In recent weeks, Mr. Hohn spoke on the phone with Comcast Chief Executive Brian Roberts and probed Comcast's interest in launching a public bid for Fox's assets, people familiar with the situation said. Mr. Roberts didn't respond, the people said.

Other TCI officials have also had conversations with Comcast's investor-relations team that left Comcast executives with the clear indication that TCI wants the cable giant to continue its pursuit of Fox, the people said.

In an email this week, Mr. Hohn said he didn't urge Mr. Roberts to go hostile in pursuit of Fox's assets.

Any shareholder influence at Fox is tempered by the ownership of Rupert Murdoch and his family, which have a 39% voting stake. Their economic interest, which is what would count in a shareholder vote on the Disney-Fox merger, is roughly 17%. (The Murdoch family is also a major shareholder in Journal-parent News Corp)

Mr. Hohn is one of the best-known activists in Europe and has historically not shied from being aggressive with big companies and significant shareholders. In 2016, Mr. Hohn took a stake in SABMiller PLC and helped get Anheuser-Busch InBev NV to raise its offer for the brewer, even though more than 40% was in the hands of two investors.

More recently, he pushed the London Stock Exchange Group PLC, with mixed success, to keep Chief Executive Xavier Rolet in place beyond this year and force the exchange operator's chairman to step down. In the end, Mr. Rolet announced his immediate departure in November to diffuse a battle over management succession, while LSE Chairman Donald Brydon indicated for the first time he wouldn't seek re-election at the annual general meeting in 2019.

--Amol Sharma and Shalini Ramachandran contributed to this article.

Write to David Benoit at david.benoit@wsj.com and Ben Dummett at ben.dummett@wsj.com

(END) Dow Jones Newswires

April 25, 2018 17:34 ET (21:34 GMT)

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