Reading between the lines at The New York Times…

January 22, 2009

As footnoted regulars know, it’s often a subtle change in words buried deep in a filing that speaks volumes. Take the 8K filed by The New York Times (NYT) late yesterday. Though the news about Mexican billionaire Carlos Slim’s $250 million loan first broke over the weekend, the actual agreement wasn’t filed until yesterday.

One of the things that caught my eye was the change in the way a change in control is defined. Here’s the section from yesterday’s filing, which adds a new definition of who exactly a “permitted holder” is — a direct relative (or beneficiary or trustee) of Iphigene Ochs Sulzberger and also provides new language on the Class B stock:

—Change of Control means the earliest to occur of: (i) at any time the Permitted Holders cease to own, at such time, in the aggregate, directly or indirectly, beneficially and of record, at least the majority of the then outstanding Class B Common Stock (or any successor class of common stock with comparable voting rights or in the event no such class exists, the common shares with voting rights); (ii) at any time the Permitted Holders shall cease to have, at such time, the right or the ability by voting power, contract or otherwise to elect or designate for election at least a majority of the board of directors of the Company; or (iii) any —Change of Control (or any comparable term) under any senior indebtedness of the Company. —Permitted Holders shall mean any descendant (or any spouse thereof) of Iphigene Ochs Sulzberger (the —Family Members) or any beneficiary or trustee (as the same may change from time to time) of a trust over 50% of the individual beneficiaries of which are Family Members (a —Family Trust).

Now the last time this language was tinkered with was a few years ago, when the Times entered into this credit agreement with Bank of America (BAC). But that was before the situation last year with Harbinger Capital that eventually led to Harbinger adding two directors to the Times’ board.

So what’s the change in language in the Slim agreement all about? Seems like an extra layer of protection in the event someone tries to figure out a way to break up the Sulzberger family and get some of those powerful Class B shares, kind of the way Murdoch was able to make his deal for Dow Jones. Then again, that’s why lawyers are paid big bucks to write this sort of thing: to make it hard for the rest of us to interpret.

Allan Sloan of Fortune has a very interesting story here on a related-aspect of the Times’ filing.

Image source: New York Times

Leave a Reply

You must be logged in to post a comment.