LONDON Taconic Capital Advisors, the $7 billion (4 billion pounds)-plus New York hedge fund, has taken a significant stake in Rupert Murdoch's buyout target, British Sky Broadcasting Group Plc BSY.L, regulatory filings this week show.
Murdoch's News Corp (NWSA.O) is seeking to buy the 61 percent of BSkyB it does not already own, and is waiting to hear from Britain's government if it will be able to avoid a full, six-month competition inquiry. [ID:nLDE7040N6] Taconic has bought more than 20.7 million shares in BSkyB, giving it a stake of about 1.1814 percent, the latest filing, made on Thursday, shows. At Thursday's closing price of 757.5 pence, the stake is worth about 156.86 million pounds ($254.3 million), according to Reuters calculations.
Under British rules, any stake of more than 1 percent in a bid target has to be disclosed. This is only the second stake in BSkyB to be disclosed by a hedge fund manager, including stakes held by long-term shareholder Crispin Odey.
His London-based Odey Asset Management has been a major shareholder since at least 2005 via funds including the Odey Pan European fund. Odey has roughly doubled his stake in the last year, and now holds 2.31 percent.
However, several brokers who work with merger arbitrageurs said they believed several smaller funds had already accumulated stakes that would not require disclosure.
Still, many other arbitrage investors are likely to wait for more clarity about the stance of British regulators and the exact terms of any deal.
News Corp offered 700p a share in June, a bid rejected as at least a pound-a-share too low by BSkyB's board.
Taconic, founded by former Goldman Sachs partners Kenneth Brody and Frank Brosens, is a multi-strategy fund with an estimated $7 billion of assets under management, as of end-January 2010, according to the Hedge Fund Journal.
Brody did not immediately respond to a request for comment.
Brosens is a former head of risk arbitrage at Goldman, and a major Democratic donor. He had been a frontrunner to run the U.S. Treasury's $700 billion Troubled Asset Relief Program (TARP) but withdrew his candidacy in March 2009.
(Reporting by Quentin Webb; Editing by Jon Loades-Carter)