By: E&P Staff and the Associated Press
Shares in the New York Times Co. rose strongly on Wednesday after a published report in the New York Post indicated that Maurice “Hank” Greenberg, the deposed chairman of American International Group Inc., was buying stock in the newspaper publisher.
This afternoon, on CNBC, Charlie Gasparino, the Newsweek business writer and longtime Wall Street Journal reporter, said that Greenberg was actually quite intent on buying the entire Times Company.
Gasparino said he thinks the Greenberg stock-buying move ?goes beyond him trying to be an activist shareholder to get the family to produce more profits for shareholder. From what I understand, Hank Greenberg is actively engaged in trying to buy the entire New York Times Company, that he has approached investment bankers and asked them if they would work for him so they could put together some sort of plan.
Gasparino admitted that investment bankers had told him it would difficult or ?next to impossible,? due to the family controlling the Times stock, ?but Greenberg is intent on pushing the envelope on this.?
Asked why, Gasparino replied: ?Greenberg believes this is an undervalued asset. Number two, there is a lot of ego here. Jack Welch is out there talking about buying the Boston Globe. Hank Greenberg wants to be in there. He?s got money to turn, and I believe there is a little revenge here. Let?s face it: The New York Times hasn?t been nice to Hank Greenberg over the years, especially as he came under investigation by Eliot Spitzer.?
Gasparino added that besides Greenberg ?apparently there is another billionaire or near-billionarie investor looking to buy The New York Times. From what I hear, a lot of people speculating, that could be Jack Welch as well?..You get a great platform and you do get an asset that if you can make it work can make a lot of money down the road.?
The New York Post reported Wednesday that Greenberg has been acquiring “hundreds of thousands” of shares in the newspaper company. The Post is owned by News Corp.
In addition to its flagship newspaper, The New York Times Co. also publishes the International Herald Tribune, The Boston Globe and 15 other daily newspapers. It also owns nine network-affiliated television stations and two New York radio stations as well as several Web operations, including About.com.
Earlier reports indicated that Greenberg also was considering a bid for Tribune Co., which has a number of newspaper holdings including the Los Angeles Times and the Chicago Tribune.
Mark Corallo, a spokesman for Greenberg, said he had no comment on the latest report.
Analysts speculated that Greenberg’s interest in the New York Times could increase pressure on company management, which has been the target of shareholder Morgan Stanley Investment Management. Morgan Stanley has asked the Times to eliminate its two classes of stock, which concentrate power in the newspaper’s founding family, and make changes to its board.
Asked about the New York Post report, Times spokeswoman Catherine J. Mathis said the company had no interest in changing the so-called dual-class share structure, which cements control of the company by the Sulzberger family.
“The Ochs-Sulzberger family has given no indication of a desire to change the dual-class structure,” she said. This was “designed to protect the editorial independence and integrity of The New York Times newspaper … and, in these challenging times, that is what it is doing.”
The report came a day after Citigroup analyst William Bird downgraded The Times to “sell” from “hold.”
He took the action as part of a report suggesting that newspapers will probably continue to see declining operating profits for about five years, until online platforms overcome print-related losses.
A number of prominent figures have expressed interest in investing in the beleaguered newspaper industry.
Jack Welch, the longtime head of General Electric Co., and other investors reportedly have sought to buy The Boston Globe from the Times.
Los Angeles billionaires Eli Broad and Ronald W. Burkle also have an interest in the Los Angeles Times, which is owned by Tribune.
Greenberg stepped down as chairman and chief executive of AIG, one of the world’s largest insurance companies, in March 2005 after New York Attorney General Eliot Spitzer launched an investigation into the company’s accounting procedures. He alleged AIG used “deception and fraud” to make its financial condition appear stronger than it was to investors.