Mexican billionaire Carlos Slim has become the largest shareholder in fourth-generation family business The New York Times Company, increasing his stake to nearly 17%, but the Sulzberger family will retain control of the media giant through its dual-class share structure.
It follows a bumpy year for the 164-year-old company, in which it continued to find its feet in the digital era, and also saw a mishandled staff changes at the senior editorial level.
Slim’s stake in class A shares previously sat at 7%, but he exercised a warrant to purchase 16 million shares at a discount price, off the back of a deal he made with the company in 2009, when he loaned it $250 million.
The deal meant Slim, one of the world’s wealthiest individuals, would be able to buy 16 million shares at a rate of $6.36. The company’s shares ended trading on Wednesday at $12.28.
The Sulzbergers retain control through their class B shares, of which they own 90%, that account for 70% of voting rights on the 14-member board.
The company received just over $100 million in the transaction, which it will use for a class A share buyback.
In a statement The Times Company’s chief executive, Mark Thompson, said: “We believe it is in the best interests of the company to continue to maintain a conservative balance sheet, and a prudent view on the allocation of free cash flow.
“This one-off repurchase programme should not be viewed as a change of position about our capital allocation plans.”
While the newspaper has seen its digital subscriptions rise this year, other digitisation initiatives, such as apps, have failed to bring in desired revenues – at least in their early stages.
In May, a taskforce headed by fifth-gen Arthur Gregg Sulzberger launched a digital innovation report outlining how the business could better compete with online rivals. The 32-year-old next gen has since been promoted to senior editor of strategy.
The report was leaked online shortly after the dismissal of executive editor Jill Abramson, who was replaced by her deputy Dean Baquet. Speculation was rife about why Abramson was asked to leave, with many media commentators suggesting it was gender related.
Shortly before she was ousted, Abramson had discovered her male predecessor received higher pay and benefits, and she had taken this up with management.