The Wall Street Journal-20080212-Firebrand- Harbinger Raise Stake in New York Times

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Firebrand, Harbinger Raise Stake in New York Times

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Two hedge funds that are working together to elect candidates to the board of New York Times Co. have doubled their joint ownership stake in the publishing company to nearly 10%, the funds disclosed in a filing with the Securities and Exchange Commission.

The filing yesterday also revealed that Scott Galloway, head of one of the funds, Firebrand Partners, met with Times Chairman Arthur Sulzberger Jr. and Chief Executive Janet Robinson on Friday. The filing didn't disclose details of the meeting.

Firebrand and Harbinger Capital Partners Fund disclosed late last month their intention to seek four seats on the Times's 13-member board. The Times is controlled by the Sulzberger family through supervoting shares but public shareholders can elect four members of the board. The Times is scheduled to hold its annual shareholders meeting on April 22.

Shortly after the funds notified the Times of their intention to seek seats, they wrote to Mr. Sulzberger and Ms. Robinson requesting the meeting.

At the time, a person familiar with Firebrand's thinking said the investors' main concern was the Times's allocation of capital, including whether it should continue to invest in as broad a mix of assets as it does.

It is unclear what the two sides discussed on Friday. In a letter to Times management yesterday, included in the SEC filing, Mr. Galloway said "we are looking forward to continuing a productive and positive dialog."

The Times is expected to oppose the election of the hedge funds' candidates, although the company hasn't yet taken a public stance. Times spokeswoman Catherine Mathis yesterday repeated previous statements that the board's nominating and governance committee was reviewing the nominees. Ms. Mathis declined to comment on Friday's meeting. Mr. Galloway couldn't be reached.

The Times, which like other newspaper publishers has been buffeted by eroding ad revenue, has come under pressure from investors to halt a precipitous fall in the value of its shares, which fell to a low of below $15 last month compared with around $26 last summer. Yesterday at 4 p.m., Times shares were trading up 38 cents at $17.16 in New York Stock Exchange composite trading.

Yesterday's filing shows that the funds began buying Times shares around mid-December, paying a little less than $18 a share initially although the stock price dropped to less than $15 before the funds notified the company of their intention to seek board seats. At that point the funds had amassed a 4.9% stake. The filing showed that the funds bought another 7.27 million shares from Jan. 30 through Feb. 8, paying in the range of $16 to $17 a share. The funds' total joint investment in the Times is now about $235 million.