Mexican billionaire Carlos Slim Helú, who bailed out the New York Times Co. with a $250 million loan during the financial meltdown, has plunked down another $100 million for more stock in the Gray Lady at a discounted price.
Times CEO Mark Thompson confirmed that Slim had exercised warrants on the stock on Wednesday and said the Times would use the money from the stock sale for a one-time stock repurchase program.
Slim, the world’s second-richest man, cashed in warrants that allowed him to buy 15.9 million shares of Class A stock at $6.3572 a share — about half the current share price of $12.28.
The stock, after rallying Tuesday when the news about Slim’s pending deal was first reported by Bloomberg News, was down 47 cents or 3.7 percent on Wednesday on the dilution.
Thompson said, “We believe it is in the best interests of the company to continue to maintain a conservative balance sheet and prudent view on the allocation of free cash flow, and this one-off repurchase program should not be viewed as a change of position about our capital allocation plans.”
Slim intends to hold onto the shares rather than flipping them for a quick profit, Bloomberg reported on Tuesday, citing a person with knowledge of the matter.
Representatives for Slim did not return calls.
Already Slim has made a nice profit on the original loan, which carried a hefty 14 percent interest rate in 2009. The Times repaid the note in full in 2011.
While the financial crisis has passed, the past 12 months have been turbulent for the Gray Lady.
In May, publisher Arthur “Pinch” Sulzberger Jr. fired executive editor Jill Abramson and replaced her with then-managing editor Dean Baquet. Shortly thereafter, Baquet was diagnosed with cancer, which delayed his filling out the masthead.
He returned after treatment only to be confronted with another round of layoffs. The Times just cut 110 newsroom jobs as rising digital revenue has yet to offset the decline in print advertising.
Despite its successful metered paywall, the Times conceded that some of its digital efforts are not working and shuttered several projects.
Executives have hinted that new sections are on the way. The Times plans to start a monthly men’s style section that will be overseen by Stuart Emmrich, who already oversees the Styles section that runs on Thursdays and Saturdays, Capital New York reported on Tuesday.