Carlos Slim Raises Stake In The New York Times To 16.8%
Mexican billionaire Carlos Slim is now the biggest stakeholder of The New York Times Company (NYSE: NYT) after entities affiliated with him exercised their warrants to acquire 15.9 million Class A shares of the company at a cost of $101.1 million or $6.3572 per share.
Slim had received these warrants in connection with the $250 million loan he financed to the company in 2009. The company was cash strapped at the time as printing revenues took a massive beating owing to recession.
To battle dwindling revenues, the company sold a chunk of its Manhattan headquarters and fired several employees. Noticeably, New York Times paid back the loan three years before the due date.
New York Times, which competes with Journal Communications, Inc. (NYSE: JRN), The E. W. Scripps Co. (NYSE: SSP) and Gannett Co., Inc. (NYSE: GCI), stated that it will use the proceeds for share buybacks. The company' current repurchase authorization allows it to buy back shares worth up to $101.1 million.
Slim, with his recently acquired 15.9 million shares, now owns 27.8 million shares or 16.8% of the company's Class A stock, which makes him the largest stakeholder. The Mexican businessman, whose empire consists of retail, industrial and telecom firms, is currently the world's second richest man with a fortune of nearly $73 billion.
However, analysts note that chances of a takeover are very lean at the moment. This is because the New York Times has a double class structure and continues to be controlled by the Sulzberger family. The Sulzberger family holds all of the company's controlling Class B shares that allow it to elect majority of the board.
New York Times is currently a Zacks Rank #1 (Strong Buy) stock. The company remains committed to streamlining its cost structure, strengthening its balance sheet and rebalancing its portfolio.
The company is also adapting to the changing face of the multi-platform media universe and has already included mobile and reader application products to its portfolio. Also, it has been adding diverse revenue streams, such as a pay-and-read model, to face adverse economic conditions.
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