Reuters- The world’s largest mutual fund firm is about to take on an unlikely title: activist shareholder.<\/p>\n
Fidelity Investments is expected next week to vote against a buyout offer for U.S. broadcaster Clear Channel Communications Inc., highlighting the increasingly active approach mutual funds are taking to boost investment returns.<\/p>\n
Competition from hedge funds that routinely take activist positions, as well as regulations that have made funds more accountable to their shareholders, are driving the $10.6 trillion mutual fund industry to become vocal on their investments.<\/p>\n
Fidelity, Clear Channel’s biggest institutional shareholder with a 9.7 percent stake, will on May 8 thumb its nose at a nearly $20 billion sweetened takeover offer for the broadcaster by bidders Thomas H. Lee and Bain Capital, a source close to Fidelity said.<\/p>\n
Charles Mangum, a Fidelity portfolio manager, has said on Fidelity’s Web site that an earlier offer of $37.60 per share for Clear Channel “significantly undervalues the company’s assets.”<\/p>\n
That offer and another one made at $39 a share had the management’s backing.<\/p>\n
Boston-based Fidelity’s vote is being watched closely, not only because of its substantial holdings in hundreds of companies, but also because it and other mainstream funds have rarely opposed management.<\/p>\n