The New York Times Co. is in discussions with Mexican billionaire Carlos Slim about investing in the newspaper publisher to help ease its financial problems, according to people familiar with the matter.
The talks are ongoing and may yet fall apart but one of the options being discussed is a preferred-stock issue. Under this scenario, the Times Co. would issue Mr. Slim preferred stock, which carr
ies no voting right but pays an annual dividend, in return for his investment. The investment would be similar to a loan. Preferred shares are often convertible into common stock after a defined period.It's not clear how much Mr. Slim would be willing to invest but the people familiar the matter said it would likely be several hundred million dollars.
Times Co. is said to be planning a special board meeting next week.
A spokeswoman from New York Times Co. declined to comment. A spokesman for Mr. Slim also declined to comment.
It's still possible that another investor could emerge to provide the Times Co. with a capital. One possibility is Harbinger Capital Partners, a hedge fund. Harbinger holds about 28.5 million Class A shares, or about a 20% stake, in the Times Co. Last year the fund waged a proxy battle in which it sought four seats on Times Co.'s board and strategic changes at the company including the sale of non-core assets like the Boston Globe. In March, Times Co. granted the group two board seats. But a deterioration both in the value of its Times Co. and other investments may make it unlikely that Harbinger would be willing to commit even more capital to the ailing newspaper company.
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