Jana, Ontario teachers buy stake in McGraw-Hill

By the Associated Press | August 1, 2011 | 6:28 PM EDT

NEW YORK (AP) — Activist hedge fund Jana Partners is teaming up with the Ontario Teachers Pension Plan Board to buy a 5.2 percent, $531 million stake in textbook publisher McGraw-Hill Cos.

Jana said in a securities filing Monday that the shares are undervalued and that it may take steps to boost shareholder value.

Shares of McGraw-Hill jumped $2.34, or 5.7 percent, to $43.50 in after-hours trading on the news.

McGraw-Hill owns the financial ratings agency Standard & Poor's, educational publisher McGraw-Hill Education, Platts energy information services and J.D. Power and Associates.

The company said last month it plans to divest its broadcasting unit as it reviews its portfolio of businesses.

Jana said it has already been in discussion with McGraw-Hill management about its business, strategy and future plans.