New York Times rejects Welch bid for Globe: source
NEW YORK |
NEW YORK (Reuters) - New York Times Co. (NYT.N) has rejected a proposal from a group of Boston businessmen, including former General Electric Co. (GE.N) chief Jack Welch, to negotiate a purchase of the Boston Globe newspaper, a source familiar with the matter said on Wednesday.
New York Times Chief Executive Officer Janet Robinson wrote in a November 17 letter to the investor group that she took the group's proposal to the company's board, but that it was not interested in pursuing a sale, the source confirmed.
The Globe reported the news in its Wednesday edition, citing two executives who had seen the letter.
The letter was a response to a request from Welch for exclusive rights to negotiate with Times Co. over an acquisition, the source also confirmed.
The investor group does not plan to abandon its effort, the Globe report said, citing executives close to the group.
"I would say this is the beginning of an extended negotiation," said Michael Wolff, media columnist for Vanity Fair, who has closely followed corporate developments at Times Co.
"Ultimately, if they are going to sell the Globe, they want the most money they can possibly get," he said. "At first blush I don't think you want to say that you're highly available."
The New York Times Co. had no comment. Representatives for the investor group could not immediately be reached.
Welch and advertising executive Jack Connors are working with JPMorgan Chase & Co. (JPM.N) and other local investors on a plan to make a bid for the Globe, which like other U.S. newspapers is coping with weak advertising trends and circulation at its print edition.
The Globe has also identified Boston concessionaire Joseph O'Donnell as a member of the group.
Average daily paid circulation at the Globe fell 6.7 percent in the six months ended September 30, 2006, compared with the same period last year, according to figures published by the Audit Bureau of Circulations.
The Globe's performance is not as good as it has been, but the newspaper still stands to gain from the growing use of its Internet sites, said independent analyst John Morton.
"It's not as though it's losing millions and millions of dollars," he said. "Eventually the market will come back."
The paper has weighed on Times Co. as it faces pressure to boost its shares, which are down 8.3 percent since the start of 2006. The benchmark Standard & Poor's 500 Index .SPX has risen 12.5 percent in the same period.
The Globe has reported that JPMorgan values the newspaper at $550 million to $600 million, about half the $1.1 billion that Times Co. paid for it in 1993.
One dissatisfied shareholder, Morgan Stanley (MS.N) affiliate Morgan Stanley Investment Media, has raised its stake in Times Co. to 7.6 percent this year and urged the company to change its voting structure to give shareholders more of a say in its future.
The Sulzberger family has controlled the paper since the late 19th century and owns a class of shares that gives its members more voting power.
New York Times shares slipped 13 cents to $24.24 in afternoon trading on the New York Stock Exchange.
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