Activist hedge fund Starboard Value is building a stake in News Corp, with expectations that it would force change at the global media company.

The company, which is controlled by the Murdoch family, has had weak earnings growth in recent years and its chair, Rupert Murdoch retired recently at 92 leaving the leadership of the company in the hands of his son, Lachlan.

New York-based Starboard is headed by Jeffrey Smith, who is yet to reveal his strategy or the actual size of his stake in the company. He is scheduled to make presentations at conferences later this week.

However, the Wall Street Journal, which is owned by News, reported Starboard believed News Corp was trading at a significant discount to its fair market value and would recommend News Corp spin off its digital-real-estate division, which includes the REA Group in Australia and Realtor.com parent Move Inc.

He was also expected to push News Corp to change its dual-class share structure. The Murdoch family holds 39 per cent of the voting stock in News Corp.

It’s not the first time News has faced a threat from activist investors.

Another New York-based entity, Irenic Capital Management, built a 2 per cent stake in News Corp last year. It urged News to spin-off its digital real estate business or Dow Jones as an alternative to its merger with Fox Corp.

News later scrapped the Fox merger.

This story first appeared in InQueensland and is republished here with permission