Jan. 19 (Bloomberg) -- Mexican billionaire Carlos Slim is in talks to invest about $250 million in New York Times Co., its flagship newspaper reported, as the publisher pursues financing to help offset a deepening slide in advertising.

Slim may buy 10-year notes that are convertible into common stock and receive a special annual dividend as high as 10 percent on the investment, the Times reported yesterday, citing people briefed on the talks. The board plans to meet today to approve the deal, which may be announced tomorrow, the newspaper said.

New York Times, with a $400 million credit facility expiring in May, is trying to shore up cash and pay down debt as ad sales dry up. The company slashed its dividend in November and is trying to raise $225 million from a sale-leaseback of its Manhattan headquarters. The company is also seeking a buyer for its stake in the Boston Red Sox baseball team, according to a person with knowledge of the talks.

Slim, the world’s second-richest man according to Forbes magazine, is increasing his holdings in the New York-based newspaper publisher from a 6.4 percent passive stake as of Sept. 4. Slim, 68, is the third-biggest investor in the company outside of the controlling Ochs-Sulzberger family.

At the time of his initial investment, he cited the company’s “attractive value.” Since Slim’s holdings were reported in a September regulatory filing, the shares have slid 52 percent. They closed at $6.41 Jan. 16 on the New York Stock Exchange, making Slim’s stake worth about $58.3 million, down from $121.2 million on Sept. 4.

No Voting Rights

The Wall Street Journal reported Jan. 17 that Slim was in talks to invest more in the company, including a possible preferred-stock issue with no special voting rights.

Catherine Mathis, a spokeswoman for New York Times, and Slim’s spokesman Arturo Elias Ayub declined to comment.

In a December memo to employees, Arthur Sulzberger Jr., the company’s chairman and the publisher of its flagship newspaper, called the 2009 financial outlook “daunting.” New York Times, the third-largest U.S. newspaper publisher, posted a 13 percent drop in ad sales for the first 11 months of 2008, including a 21 percent plunge in November.

Last month, the company said it was open to funding options that include revolving debt, public offerings and private placements. New York Times also said it was in talks with lenders and doesn’t plan to fully replace the $400 million credit facility. The publisher finished the third quarter with $1.1 billion in debt and $46 million in cash and equivalents.

Slim owns America Movil SAB, Latin America’s largest mobile- phone service provider, and Telefonos de Mexico SAB, that country’s biggest land-line operator.

To contact the reporter on this story: Sarah Rabil in New York at srabil@bloomberg.net

Last Updated: January 19, 2009 11:07 EST