Starboard CEO makes case for spinning off real estate assets from WSJ owner News Corp

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Jeffrey Smith, CEO of activist firm Starboard Value, is making the case to separate News Corp.’s real estate assets from its news business.

The firm's CEO Jeffrey Smith told CNBC's David Faber on Tuesday Starboard has been in discussions with News Corp.

Smith said News Corp. should split out its real estate assets, including an interest in REA Group of Australia. News Corp. also owns the Dow Jones news business, which includes publications such as The Wall Street Journal and New York Post. A News Corp. spokesperson said Tuesday that the company has"always maintained an active and engaged dialogue with our investors and are committed to driving shareholder value.""We remain focused on executing our strategic plan, which has helped us set records in profitability over the past three years," the spokesperson said. "We are proud of our rapid digital transformation and bright prospects for long-term growth and value creation.

On Tuesday, Smith called out the valuation discrepancies between the news and real estate businesses. He noted that News Corp.'s"crown jewel" news division trades at four-times earnings before interest, taxes, depreciation and amortization – compared with competitor New York Times, which trades at 15-times."It's a great business, a great asset, it's just too cheap," Smith said of News Corp.'s stock price. News Corp. shares were slightly down on Tuesday at $21.

 

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