Dissident hedge funds raise stake in Times Co.
Two hedge funds trying to elect a dissident slate to the board of The New York Times Co. amassed 19.03 percent of the company’s common stock before last week’s deadline for gaining voting power at the April 22 annual meeting, according to a report filed today.
That rivals the holdings of the Times Co.’s chairman, Arthur Sulzberger Jr., and his family, who have effectively controlled the selection of directors. A two-tiered stock structure gives the family unfettered control of nine of the 13 board seats; what the hedge funds are fighting for is control of the other four.
The funds, Harbinger Capital Partners and Firebrand Partners, contend the company is not taking full advantage of its potential value.
They say the Times Co. should sell assets, focus on the flagship newspaper, The New York Times, and invest more in Internet operations.
The funds have said they do not intend to challenge the two-tiered stock structure or the control of the company by the Sulzbergers.
The company’s assets include About.com, The International Herald Tribune, The Boston Globe, a string of smaller newspapers, and a minority stake in the Boston Red Sox.
Last week, the company nominated four directors for election by Class A shareholders and sent letters to shareholders urging them not to return proxy cards from Harbinger and Firebrand. But it insisted the slate was preliminary and that it was still considering the candidates of the hedge funds.
Harbinger and Firebrand said they accumulated more than 27.2 million shares for about $500 million. They stated they own 19.03 percent of the Class A shares. Class A shares are more than 99 percent of the shares outstanding but have less voting power than the much smaller number of Class B shares.
The company said the Sulzberger family owns about 19 percent of all shares, A or B. That includes a family trust that holds almost 90 percent of the Class B shares, which are not available to the public and have sole power to vote on nine of the 13 board seats.
(New York Times News Service)
