Revenge of the Luddite

Fit this news into your day…

by Tim Arango
NEW YORK (Fortune)—Arthur Sulzberger Jr. survived the Jayson Blair scandal and Judith Miller’s jailing, but as proxy season beckons, the publisher and chairman of The New York Times faces a new challenge. This one is from Hassan Elmasry, a London- based managing director of Morgan Stanley Investment Management who has been trying to incite a shareholder revolt against Sulzberger.

Fortune has learned from a New York Times source and others close to the matter that the Ochs-Sulzberger family recently put in a request to pull the majority of its assets from the bank. (Morgan Stanley (MS-NYSE) had been the longtime custodian of the family’s assets, including its stake in the Times company - which, based on recent share prices, is worth close to $640 million.) Elmasry is in charge of Morgan Stanley’s American and Global Franchise Strategies Portfolio, an $11.5 billion investment fund that owns about 7.6 percent of the Times’ nonvoting shares. The stock, now around $24, is down nearly 40 percent over the past two years. His response: a proposal that the company eliminate its dual shareholder structure, which he believes fails to provide adequate oversight of management.

Some people think mind share is more important than market share...and have an inflated sense of their importance in the emerging pecking order…

“The Times company does not want to open its doors to the kind of turmoil that really rips apart an organization,” says Janet Robinson, CEO of the New York Times Co., referring to recent shareholder uprisings at Knight Ridder and Tribune Co. “This is a very important institution not only to the media community but to the nation at large.” (Recently Robinson announced an $814 million writedown on the Boston Globe and another New England paper - an accounting charge that highlighted a past financial misstep.)

Do you like intrigue? Cloaks? Daggers?

Elmasry’s cause will be strengthened if he succeeds in lining up Bruce Sherman, the head of Boca Raton-based Private Capital Management. He is the largest owner of Times stock outside the family, with an 18.5 percent stake. Sherman also, of course, was the activist shareholder who forced the sale of newspaper chain Knight Ridder to McClatchy (Charts). He has had discussions with Elmasry but has not yet decided if he wants to jump into the fray

Read entire article here

-------------------------------------------------------------------------------------------------------------------------------------
The content contained in this blog represents the opinions of 1440 Wall Street. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author. Underthecounter has no positions in any securities or funds mentioned above.

Comments:

<< Back to main