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Update: Citing “people briefed on the transaction,” the New York Times reported late Sunday that a deal with Mexican billionaire Carlos Slim to invest “about $250 million” in its parent company could come as early as Monday. But, the same people also warn Andrew Ross Sorkin that “several details still needed to be completed and that it remained possible the agreement could collapse.” As outlined to Sorkin: in exchange for $250 million, Slim, who bought 6.4 percent of the company’s shares last fall, would get 10-year notes with warrants that would be convertible into common shares; he also would get a special annual dividend that could run 10 percent or more. Company control would not change. The board is scheduled to meet Monday and, if it all works out, an announcement could come Tuesday. (Monday is a U.S. holiday and Tuesday is the inauguration of Barack Obama as the 44th president.) For the record, the paper credits rival WSJ with the scoop. Still no official comments from Slim or NYTCo.
Original: With one $400 million credit facility expiring in May, the New York Times Company (NYSE: NYT) continues to look at fundraising options including a stock issue, the sale of its interest in New England Sports Ventures, and a sale-leaseback of some of its interest in the company’s mid-Manhattan headquarters. Now comes word that NYTCo is in talks with Mexican billionaire Carlos Slim, who owns 6.4 percent of the company’s stock, for a possible cash infusion, WSJ.com reports. Citing “people familiar with the matter,” WSJ says the two parties are talking about “several hundred million dollars” but cushions the story by saying “the talks are ongoing and may yet fall apart.” One option would be a preferred-stock issue; Slim would not get voting rights but would get preferred stock and be paid a dividend in return for his investment.
Slim acquired his stake in the publishing company in early September. The value at the time: approximately $127 million, 9.1 million shares at $13.96 a share.The value now: about $58 million based on Friday’s $6.41 close. Slim, the owner of Telmex, can afford the investment but will he want to increase his risk with NYTCo by hundreds of millions?