Friday, August 12, 2022

Activist Investor Buys Stake In The NY Times


ValueAct, an activist investor that has taken stakes in major companies including Microsoft, Reuters and 21st Century Fox, said on Thursday that it had bought nearly 7 percent of The New York Times Company’s common stock and would push for changes to some of the publisher’s business operations.

The NY Times reports the purchase of the stock, made public in a filing with the Securities and Exchange Commission on Thursday, makes ValueAct one of the largest shareholders in The Times, alongside Vanguard and BlackRock Fund Advisors. The Times is controlled by the Ochs-Sulzberger family, which limits the influence outside investors have on the company.

Shares of The Times, which are down about 27 percent year to date, jumped more than 10 percent on news of ValueAct’s investment, which was first reported by Bloomberg.

In a letter to its investors on Thursday, ValueAct said it had conducted research that showed many consumers were not aware that The Times sells a bundled subscription to its products, which include news, games, a cooking app and the sports publication The Athletic. ValueAct said that created a potential growth opportunity.

“This is an opportunity we believe management needs to drive with urgency, as it is the biggest lever to accelerate growth, deepen NYT’s competitive moat, and ensure the long-term strength and stability of the platform,” ValueAct said in the letter, according to a person with knowledge of its contents.

The Times has 9.17 million paid subscribers. It has a goal of signing up 15 million by the end of 2027.

The Times Company has a dual-class share structure. The shares used to elect the majority of the company’s board, called Class B, are controlled by a trust for the Ochs-Sulzberger family, which owns 95 percent of these shares. The family has controlled the business since Adolph Ochs purchased it in 1896. The 13-person board is chaired by A.G. Sulzberger, who is also the publisher of The Times.

Danielle Rhoades Ha, a Times spokeswoman, said in a statement that members of the company’s management team had held conversations with ValueAct to exchange views.

San Francisco-based ValueAct is one of the oldest and well-known activist investors in the business. When the fund puts money into a company, changes usually occur—sometimes subtle, sometimes drastic.

The Wall Street Journal reports ValueAct paid around $350.2 million for the shares. Based on the current share price, ValueAct’s stake is valued at around $387 million.

ValueAct said in the filing that it believes that New York Times shares are undervalued and represent an attractive investment opportunity.

ValueAct invests in a small number of companies at once and, in many cases, pushes for representation on the board. It is known for doing much of its work quietly, working behind the scenes to influence decision-making.

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