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ValueAct, a San Francisco-based hedge fund, disclosed on
Thursday that it owns a nearly 7% stake in the New York Times
and argued the newspaper company could grow more quickly by
aggressively marketing its all-access digital bundle that gives
subscribers more than basic news.
The Ochs-Sulzberger family controls the New York Times through
dual-class shares that allow it to install nine directors on the
company's 13-member board.
The structure of the board would give ValueAct scope to
challenge the company for one of the other four board seats in a
shareholder vote. The New York Times is working with the bankers
and lawyers to prepare for this possibility, the sources said.
Proxy solicitor Okapi Partners LLC, which works with companies
as they count votes in shareholder meetings, is also advising
the New York Times, the sources added, requesting anonymity
because the matter is confidential.
Representatives for the New York Times, ValueAct, Sidley, Okapi
and Bank of America either declined to comment or could not be
reached for comment. The New York Times said in a statement on
Thursday that its management had met with ValueAct to exchange
views.
In a regulatory filing on Thursday that disclosed its stake, the
hedge fund said it would have discussions with the New York
Times to see "whether it makes sense for a ValueAct Capital
employee to be on the issuer's board of directors."
The New York Times has expanded beyond its core newspaper
offering in recent years to include the sports website The
Athletic, product review website Wirecutter, a cooking app and
games. While its digital subscriptions have grown, its shares
are worth about 30% less than what they were valued at about a
year ago because advertisers have cut back on spending amid
fears of an economic downturn.
ValueAct, founded by Jeffrey Ubben two decades ago and now run
by Mason Morfit, typically avoids challenging companies for
board seats through proxy contests and often secures board
representation with the agreement of companies they invest in.
ValueAct investments have included Microsoft Corp, where Morfit
had a board seat, Adobe where former ValueAct partner Kelly
Barlow had a seat and Citigroup Inc.
(Reporting by Svea Herbst-Bayliss in Boston; Editing by Greg
Roumeliotis and Aurora Ellis)
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