New York Times Stock, Options Surge on Takeover Talk
New York Times Co. was the biggest gainer in the Standard & Poor’s 500 Index and bullish options trading surged to a six-month high on renewed speculation the newspaper publisher may be acquired.
Almost 7,200 calls to buy the stock changed hands, 40 times the four-week average and six times the number of puts to sell. The most-active contracts were October $9 calls, which almost doubled to 35 cents and accounted for about two-thirds of call volume. Before today they had an open interest of five outstanding contracts.
“The speculators are betting that someone may come in and bid for the New York Times,” said Chris Rich, head options strategist at JonesTrading Institutional Services LLC in Chicago. “The call buyers are indicating with the purchase of the $9 options that achieving that price is possible.”
The publisher’s stock rose 62 cents, or 8 percent, to $8.38 at 4 p.m. in New York Stock Exchange composite trading for the biggest gain since June 10. The stock led the S&P 500 which rose 0.6 percent to 1,098.87.
Billionaire Carlos Slim, who controls Mexico’s biggest wireless and land-line phone companies, owns about 7 percent of New York Times’s Class A shares. He also has warrants to buy enough stock to give him control of 16 percent of the shares.
“The rumor mill is being cranked up again saying Carlos Slim wants to buy the company,” said Edward Atorino, an analyst at Benchmark Co. LLC in New York. “But it’s a complicated process for that even to be possible - I never want to say never, but these rumors have come and gone before.”
Hard Takeover
Arturo Elias, a spokesman for Slim, said the billionaire continues his stance that he doesn’t want to buy or take control of the New York Times.
“We know nothing about this,” Elias said in an e-mail, referring to takeover speculation.
Members of the Ochs-Sulzberger family would have to agree to any takeover. The family controls 90 percent of Times Co.’s Class B stock, which entitles them to elect 70 percent of the board of directors and to vote on all other matters, according to company filings.
“A takeover is hard with the Times because there’s two classes of stock and hedge funds have tried but never penetrated that real high ownership class,” said John Eade, an analyst at Argus Research Corp. in New York.
Diane McNulty, a spokeswoman for the New York-based publisher of the namesake newspaper, declined to comment.
Slim said Nov. 16 that he invested in New York Times because he believes the news company “will pay.” Slim, who controls America Movil SAB, agreed to give the publisher a $250 million loan in January 2009.
“That is one of the best newspapers and brands in the world,” Slim said in November at a Wall Street Journal CEO Council in Washington.
To contact the reporters on this story: Kelly Riddell in Washington at kriddell1@bloomberg.net Jeff Kearns in New York at jkearns3@bloomberg.net;
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