Wednesday, January 14, 2015

World's second richest man Carlos Slim now largest investor in NY Times after bailing out the Times in 2009 with $250 million loan-Bloomberg

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1/14/15, "Billionaire Carlos Slim Doubles Holdings in New York Times," Bloomberg,

Billionaire Carlos Slim became the largest investor in the New York Times Co. after exercising options to acquire 15.9 million shares in the newspaper company.

Slim bought the shares for $6.36 each, about half of Times Co.’s $12.28 closing price, boosting his stake to 16.8 percent of the company’s Class A shares, Times Co. said today in a statement. Slim, the world’s second-richest man, gained the options after he lent the paper $250 million in January 2009 to help it get through the financial crisis.

The larger stake, now 27.8 million shares, shows the billionaire’s confidence in the newspaper’s future -- even as readers and marketers have flocked to the Internet where content is largely free and ad rates are cheaper. Since Slim’s loan, Times Co. has cleaned up its balance sheet, created a paywall for its website and introduced new digital products. 

Times Co. said it received $101.1 million from Slim’s exercise of his warrants and plans to use the money to buy back Class A shares....

Slim’s stake in the company is now valued at $341 million based on today’s closing price. Fairpointe Capital is now the Times second-biggest shareholder, with a stake of 9.44 percent as of Sept. 30, according to data compiled by Bloomberg....

When 74-year-old Slim agreed to loan Times Co. money in 2009, the company had just canceled its dividend to preserve cash and a credit line was set to expire. Slim’s investment bought the company enough time to find buyers for assets like the Boston Globe

Even with the bigger stake, a takeover would be difficult because the controlling owners -- the Ochs-Sulzberger family -- hold voting shares that give them a firm grip on board seats. Slim’s stake only allows him to vote for Class A directors, a group that represents no more than a third of the company’s board seats. The family’s Class B shares, which aren’t publicly traded, elect the remaining two-thirds of the board....

The Times Co. investment is only one element of Slim’s empire, which ranges from banking to energy to retail. The bulk of his riches come from a majority stake in America Movil SAB (AMXL), the mobile-phone operator trying to sell assets in Mexico to reduce its market share."...via Drudge




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