The Mexican billionaire Carlos Slim has become the largest holder of publicly traded shares in the parent company of the New York Times.
Slim is ranked by Forbes as the world’s richest person, ahead of Microsoft founder Bill Gates, with a fortune estimated at $79.6bn (£52bn).
He stepped in to shore up the New York Times Company with a $250m loan at the height of the recession in 2009, as the newspaper struggled with shrinking readership, declining ad revenues and faced the imminent expiry of a loan facility.
As part of the deal Slim received 10-year notes with warrants convertible into shares.
On Wednesday Slim exercised those warrants, acquiring 15.9m shares in the New York Times Company’s publicly traded stock at $6.35 per share, roughly half the current price the shares are trading at.
As a result of the deal the New York Times will receive $101.1m.
Slim now owns 27.8m class A shares in the company – 16.8% of the stock – making the telecommunications mogul the largest holder of its publicly traded shares. Slim’s move does not affect the control of the company.
The Sulzberger family controls the New York Times through a trust that owns 90% of its class B stock, which isn’t publicly traded, as well as almost 4% of class A shares.
Holders of class B stock elect 70% of the company’s board.
Mark Thompson, president and chief executive of the New York Times Company, said that the $101.1m proceeds from the deal would be used to buy back shares from “time to time”.
“We believe a share purchase program in this instance is an appropriate use of the cash proceeds we will receive upon the exercise of the warrants and the issuance of the class A shares,” he said.
“We believe it is in the best interests of the company to continue to maintain a conservative balance sheet and a prudent 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.”
