By: E&P Staff [NOTE: A previous version of this story reported that the company was planning to sell nine TV stations. This actually occurred in 2007. We regret the error.] The New York Times Co. is talking with Mexican billionaire Carlos Slim Helu about investing as debt woes increase, the Wall Street Journal reported today, citing "people familiar with the matter."
The Journal related on the Slim deal: "The talks are ongoing and may yet fall apart but one of the options being discussed is a preferred-stock issue. Under this scenario, the Times Co. would issue Mr. Slim preferred stock, which carries no voting right but pays an annual dividend, in return for his investment. The investment would be similar to a loan. Preferred shares are often convertible into common stock after a defined period.
"It's not clear how much Mr. Slim would be willing to invest but the people familiar the matter said it would likely be several hundred million dollars.
"Times Co. is said to be planning a special board meeting next week.
A spokeswoman from New York Times Co. declined to comment. A spokesman for Slim also declined to comment.
The Journal continued: "It's still possible that another investor could emerge to provide the Times Co. with a capital. One possibility is Harbinger Capital Partners, a hedge fund."
UPDATE: The New York Times itself now reports the following: "Carlos Slim Hel?, the Mexican billionaire, is near a deal to invest about $250 million in The New York Times Company, helping to shore up the publishing company?s struggling finances, according to people briefed on the transaction.
"The company?s board is expected to meet on Monday to approve the deal, these people said, and an announcement could be made as early as Tuesday. However, these people also warned that several details still needed to be completed and that it remained possible the agreement could collapse.
"The deal would come as the Times Company moves to raise money amid flagging advertising sales and approaching deadlines to pay back hundreds of millions of dollars of debt over the next two years. The company has put its stake in the Boston Red Sox up for sale and said last year that it would borrow as much as $225 million against its new headquarters in Manhattan through a sale-leaseback agreement.
"Under the terms of the deal, Mr. Slim, who already owns 6.4 percent of the Times Company, would invest $250 million in the form of 10-year notes with warrants that are convertible into common shares, these people said.
"As part of Mr. Slim?s investment, which resembles a loan, he is expected to get a special annual dividend, perhaps as high as 10 percent or more on this investment, these people said.
"Mr. Slim is not expected to get any representation on the company?s board or any shares with special voting rights like those of the Sulzberger family, which controls the company. Nonetheless, when Mr. Slim exercises the warrants, he would become the largest shareholder in the Times Company, owning about a third of the common stock.
"The Sulzbergers own about 19 percent of company and control it with a special class of voting shares."
There's more at:
http://www.nytimes.com/2009/01/19/business/media/19times.html
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