ValueAct takes $1 billion stake in 21st Century Fox

(Reuters) - Hedge fund ValueAct Capital LLC said it had taken a $1 billion stake in Rupert Murdoch-controlled film and TV company Twenty-First Century Fox Inc.

Fox withdrew its $80 billion bid to buy Time Warner last week after being rebuffed by the owner of CNN, HBO and Warner Bros studios. Murdoch said he has no plans to pursue another company as an alternative.

"We support (Fox's) stand-alone plan and (believe) that it would drive the stock higher," ValueAct Chief Executive Jeffrey Ubben told Reuters, adding that he sees Fox as a $50 stock in three years.

Fox shares were up 1 percent at $34.69 in late morning trade on the Nasdaq.

Ubben also said he supported Fox's $6 billion share repurchase plan.

"We thought it was something they should do if they were to walk away, to remind people of their cash flow."

Fox did not immediately respond to requests for comment.

CNBC reported ValueAct's stake earlier on Monday.

(Additional reporting by Soham Chatterjee and Liana Baker; Editing by Ted Kerr and Saumyadeb Chakrabarty)