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Activist investors take 5.2% share in McGraw-Hill

McGraw-Hill, the family publishing business set up in the late 1800s, was the target of activist investors again this week, building pressure for a breakup of the conglomerate.

McGraw-Hill, the family publishing business set up in the late 1800s, was the target of activist investors again this week, building pressure for a breakup of the conglomerate. 

Hedge fund Jana Partners and a Canadian pension plan, Ontario Teachers' Pension Plan Board,announced they now have a combined 5.2% share in the US company, which has already been heavily targeted by activist investors this year.

Jana Partners, which was founded by Barry Rosenstein, already has a reputation for forcing breakups of firms. In the spring, it increased its investment in energy company El Paso - just weeks later, El Paso announced it would split in two.

Although McGraw-Hill’s chairman and chief executive, Harold W McGraw III, the great grandson of founder James H McGraw, owns just 4% of the business, the publisher is often seen as a family company.

The company brought back shares from trust and a foundation established by the late Harold W McGraw earlier this year, purchasing 2,297,627 shares of its common stock from the trust and 156,887 shares from the Harold W McGraw, Jr Family Foundation, although both continue to be big shareholders.

McGraw-Hill, which boasts rating agency Standard & Poor among its brands, appeared unimpressed with the latest activist investors’ actions, arguing it was already taking a number of measures to boost its performance.

In a statement, the company said: “As stated previously, McGraw-Hill is conducting a comprehensive portfolio review which includes reevaluating its strategic core to ensure it is appropriately allocating capital to generate shareholder value.”

Founded in 1988, McGraw-Hill currently employs about 21,000 employees in 40 countries. It reported sales of $6.2 billion in 2010. 

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