Hedge fund Oceanwood Capital Management called on Norwegian media company Schibsted to buy back about 10 percent of its shares to help drive up its value.
Schibsted should be trading “significantly” above its present level, Oceanwood Chief Investment Officer Christopher Gate wrote in a July 5 letter to the Norwegian company’s board.
Oceanwood, founded in 2006 by Gate and an investment team from Tudor Investment Corp., owns 1.1 percent of Schibsted A-shares and 0.5 percent of its B-shares, according to the letter.
Schibsted’s shares nearly erased losses on news of the letter, before trading 0.9 percent lower at NOK 234 (USD 27) as of 11:53 a.m. in Oslo.
While Schibsted has a history of building value through acquisitions, a buyback is the best way to tackle the current discount to peers, Gate wrote in the letter seen by Bloomberg.
“We strongly encourage the company to proceed with the start of a share buyback program while the opportunity is there,” Gate wrote. It’s highly unlikely” that Schibsted could buy other high-quality assets as cheaply as it can now purchase its own shares, he said.
Oceanwood said it remains supportive of Schibsted’s management team and focus on growing in Nordic marketplaces and financial services.
A spokesman for Oceanwood declined to comment. A representative of Schibsted confirmed receipt of the letter from Oceanwood and declined to comment further.
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