One of the Harvard endowment’s chief invments has recently made a bid to buy a controlling interest in Reader’s Digest Inc.

More than a week has now passed since the deadline for finalizing Highfields Investment’s offer, with no word on the status of the deal from the parties involved.

Highfields Investments, a hedge fund started by former Harvard Management Corporation (HMC) investor Jonathan Jacobsen that invests around $1 billion of Harvard’s endowment, already owns a large part of Reader’s Digest stock.

The fund made the offer out of “frustration with the apparent unwillingness of [Reader’s Digest’s] management to more aggressively manage [its] capital and portfolio of businesses,” according to Highfields’ filings with the Securities and Exchange Commission (SEC).

In the filing Highfields says that it wanted Reader’s Digest to improve or sell some of their music, book and magazine businesses before looking to make any more business acquisitions.

Reader’s Digest has seen its profits slump with the economy, but nevertheless purchased Reiman Publications for $760 million in March, causing Highfields to step up the struggle to take control of Reader’s Digest.

Highfields currently owns 10 percent of Reader’s Digest non-voting stock and 3.5 percent of its voting stock. In the deal it would acquire a majority of the voting stock from Wallace-Reader’s Digest Funds, which owns 50 percent of the voting stock.

The deal would involve Highfields swapping its non-voting stock for equal shares of Wallace’s voting stock and paying an additional $3 per share.

Reader’s Digest has seen its revenues and stock price drop and has had to stop production of two magazines because of the economic downturn’s pinch on the publishing industry and decreased business from their sweepstakes mailings.

A source close to the deal said that while Reader’s Digest was interested in Highfields’ suggestions about ceasing acquisitions of other companies, the company felt that the Reiman deal was too good to pass up.

“The Reader’s Digest board liked the Reiman acquisition because it brings $300 million in revenues and operating cash flows in excess of $70 million,” he said.

He said that despite the sway Highfields has as a large investor, they could do nothing to prevent the purchase because only mergers, not acquisitions, require shareholder approvals.

“It’s a board [of directors] decision,” he said.

On March 26 Highfields filed a strongly worded statement with the SEC that soon was made public expressing frustration with Wallace-Reader’s Digest President Chris Devita and the company’s board of directors after the decision to not take up Highfields’ offer.

The statement says that Highfields had “expressed its disappointment in the Wallace Funds’ curt dismissal of Highfields’ firm and fully financed proposal to exchange Nonvoting Shares for the Wallace Funds’ Shares, especially in light of [Reader’s Digest’s] long-standing poor performance.”

According to the filing, Highfields officials met with members of the Reader’s Digest Board of Directors and requested that the company take a more aggressive stance, including buying back shares and attempting to increase its earnings per share.

According to the filing, on March 26 Highfields also sent a letter to Devita with an even more explicit statement of its intentions, and raised their offer to $5 per share. In addition, the fund said once it had made changes to Reader’s Digest, all shares in the company would be turned into voting shares, thereby relinquishing control of the company to all investors.

“To be clear,” the letter states, “Highfields is willing to pay the Wallace Funds $31 million for voting control of the Company and then give up that control for the benefit of all shareholders including the Wallace Funds. Certainly the immediate benefit to the beneficiaries of the Wallace Funds would be substantial.”

The April 2 deadline for the offer of has since come and gone, and Wallace has not changed their stance on the offer.

A spokesperson for Wallace declined comment on the matter, and Highfields co-founder Richard Grubmandid not return calls for comment.

Jack Meyer, the president of HMC, which owned nearly $11 million in Reader’s Digest stock as of last quarter independently of Highfields’ investments, also did not return a call for comment.

—Staff writer Joseph P. Flood can be reached at flood@fas.harvard.edu.