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Market Responds Positively to Billionaire Slim’s Investment in New York Times

12 September 2008 - News - Editor

New York Times shares rose by 9.1percent to $15.23 at 4:15 pm on Thursday after it was revealed that 6.4 percent of the publisher’s publicly traded stock has been bought by Carlos Slim Helú. The Mexican billionaire is reportedly the second richest man in the world and has earned a reputation for having an eye for value, which likely prompted the rise in the share price as investors may have perceived his purchase to be a sort of ‘stamp of approval’ on the New York Times.

Slim, together with a family-owned holding company, Inmobiliaria Carso, bought 9.1 million Class A common shares, making them the third-biggest shareholder in the New York Times, excluding the Sulzberger family which has controlled the paper since 1896. The regulatory filing, which revealed the extent of Slim’s share purchase, notes that the stake is passive. While this may have settled the speculation that Slim wants to be actively involved on the board, investors are still wondering if this purchase precedes a re-shuffle of some sort and even possibly that a third party is looking to acquire the New York Times.

As the biggest shareholder in New York Times (once again excluding the Sulzberger family), on 1 August, hedge fund Harbinger Capital Partners increased its stake in the New York Times to 28.5 million shares, representing close to 20 percent of the stock outstanding. According to its latest filing on 30 June, the second-biggest shareholder, T. Rowe Price Group Inc. holds 15.2 million shares, representing an 11 percent stake.

With an estimated wealth topping $60 billion, in March 2008, Carlos Slim Helú was ranked by Forbes magazine as the second-richest man in the world, with Warren Buffet at number one and Bill Gates ranking third. Slim owns a majority stake in Latin America’s telecommunications network, both land-line and mobile. He also owns department stores, a banking group, restaurants, and has stakes in manufacturers of floor tiles, cigarettes and car parts.

The New York Times is facing a host of problems that has seen its share price vacillate during this year. One of the major issues the newspaper is facing is a significant decrease in advertising revenue, as more and more readers turn to the internet for up-to-date news. Nonetheless, a spokesman for Slim confirmed that he views the company as having “attractive value” and further investment in the New York Times remains a possibility.

 


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