PrintJanuary 18, 2009
Nuevo York Times?
Last night, citing unnamed sources, the WSJ reported on its website that the New York Times Company is in talks with Mexican billionaire Carlos Slim, who is said to be interested in purchasing a new issue of preferred stock, as a way of injecting new finds to rescue the struggling company.
Slim is a self-made man, descended from a Lebanese immigrant to Mexico, Julián Salim, becoming a multi-billionaire in telecommunications, controlling Mexico's dominant telephone companies in land lines and cellular service. In 2008, Forbes reckoned him the second ricjest man in the world, worth $60 billion.
Slim apparently likes to invest in rescue attempts of marginal companies. One of his investments, Comp USA, shut its doors and is in liquidation. Not exactly a hopeful omen for Pinch Sulzberger.
If Slim invests in preferred stock, he will receive a dividend, but have no voting rights. According to the NY Post, Slim bought 6.4% of the NYT common stock last fall for $118 million, an investment now worth considerably less at market prices. Normally, dividends owed to preferred stock can be cut, but accumulate, to be paid back when finances permit. Preferred stock often can be converted into common shares. All of these terms are subject to negotiation when the issue is first planned.
Without knowing the final details, it is impossible to know how much, if any, control Slim could have should the situation at the Times worsen. But a canny negotiating strategy could potentially give him control, should the Times be desperate enough.
