Greenberg denies push to buy Times Co. stock
Shares rose 7.5% on initial report
The New York Times Co. stock jumped 7.5 percent yesterday, its biggest gain in almost six years, on reports that billionaire Maurice "Hank" Greenberg , former chairman of insurance giant American International Group, was snapping up shares of Times Co. in a bid to challenge its two-tier ownership structure.
Shares of the newspaper company, parent of The Boston Globe, rose $1.73 to $24.76 in New York Stock Exchange trading. The gain came after the New York Post, citing unidentified sources, said the 81-year-old Greenberg has bought hundreds of thousands of Times Co. shares.
After the market closed, however, a spokesman for Greenberg said he owns less than 100,000 of the approximately 143 million Times Co. shares outstanding and "has no present intention of significantly increasing his holding." The spokesman, Mark Corallo , wouldn't comment on the Post's report that Greenberg wants to loosen the founding Ochs-Sulzberger family's control over the newspaper company or a CNBC television report that he wants to buy the company.
A Times Co. spokeswoman, Catherine J. Mathis, yesterday said the company is not aware of any stock purchases by Greenberg, who earlier had been reported to be weighing a bid for Tribune Co., owner of the Chicago Tribune, Los Angeles Times, and other newspapers.
Mathis issued what she said is the most definitive statement to date that the family remains committed to the company's two classes of stock. "The Ochs-Sulzberger family has no intention of changing the dual-class structure of The New York Times Co.," she said.
Members of the family together own about 20 percent of Times Co., making them the largest shareholder block. Under the dual-class structure, which has been in place since before the company went public in 1969, family members own 89 percent of the Class B voting shares. Class B shares represent less than 1 percent of the company's equity, but the shareholders elect nine of the company's 13 directors. They also own 19 percent of the publicly traded Class A shares.
Some nonfamily Class A stockholders have complained that the dual-class structure is unfair and that company chairman Arthur O. Sulzberger Jr. , who also is publisher of The New York Times, is accountable only to Class B holders. The company's shares, which traded above $40 in late 2004, have tumbled over the past two years.
"Our stance is that there's value to be unlocked in the company," a spokeswoman for Hassan Elmasry , manager of the Morgan Stanley Investment Management fund, which owns 7.6 percent of Times Co., said yesterday. Elmasry has led a shareholder push to boost the share price and scrap the two-tier structure.
Greenberg, chairman and chief executive of C.V. Starr Cos., a New York umbrella company for insurance underwriters, left AIG in March 2005 after New York Attorney General Eliot Spitzer opened a probe into its accounting practices, charging that AIG used fraudulent tactics to burnish its financial books.
Under federal securities law, Greenberg would not have to file public notice of his investments in Times Co. until 10 days after they exceeded 5 percent of the company's total outstanding shares. That threshold is more than 7 million shares.
The financial pressure on public newspaper companies, which are losing advertisers and readers to the Internet, has sparked interest by wealthy investors seeking to buy the companies or individual papers. Former General Electric Co. chairman Jack Welch and former Boston advertising executive Jack Connors are leading a group that is exploring an offer for the Globe. Billionaires Eli Broad and Ronald W. Burkle have expressed interest in the Los Angles Times.
Rem Rieder , editor of the American Journalism Review, said the dual-class stock structures at Times Co., and at the companies that own the Washington Post and Wall Street Journal, protect their quality and ability to cover international news, including the war in Iraq. "Hopefully the two-tier stock structures will survive," he said. "So many papers have scaled back, and that means there are fewer newspapers investing in the resources needed for public service reporting."
Robert Weisman can be reached at weisman@globe.com. 