Could The New York Times Co. go private?

Bloomberg
The New York Times Co. is “better positioned than ever” to become privately held, writes Bloomberg’s Edmund Lee. Its stock price is low and it has built up a lot of cash through recent sales of its regional papers and the Red Sox; it may soon sell About.com.

Times Co. would have about $840 million in cash and short-term investments — equal to 61 percent of its $1.37 billion market value — if it succeeds in selling how-to website About.com. That would be more cash versus its market value than any U.S. publisher worth $200 million or more, according to data compiled by Bloomberg.

Dueling analysts:

  • “Now would be a good time for the company to go private … The Times and other print newspapers are at an all-time low in valuations. They have been ‘cleaning up’ the business by selling off orphan assets for some time now.” — Reed Phillips, managing partner and co-founder of investment bank DeSilva & Phillips
  • “It’s a big stretch to go private,” Atorino said. “They still have a lot of debt and the business is going downhill — who would finance it?” — Benchmark Co. media analyst Edward Atorino

Investment bankers have a vested interest (fees) in talking up such a possibility, Poynter business analyst Rick Edmonds told me via email.

I think there are some counterarguments along the lines of Atorino’s comments. Determining a fair buyout price for shareholders is tricky in the best of times, and these are far from the best of times for the Times. Not clear who would lend on the company’s demonstrated earning power lately. Maybe the classic breakup scenario (sum of the parts more highly valued than the company) applies, but lots of those parts are already gone. Pension liabilities a factor too. I do agree with the thesis that selling the [Boston] Globe and leveraging interest in the building would be essential to taking it private.

Not impossible, but I would put the odds at less than 50-50.

Related: New strategy at the Times emphasizes “mobile, video, social engagement, and new global markets” (Capital New York) | “Crazy” plan for survival of Philly papers is to stop printing Inquirer except on Sundays and take Daily News offline (The Philly Post) | Warren Buffett nearly doubles holdings in Lee Enterprises (St. Louis Post Dispatch)

Earlier: The New York Times names BBC head, Mark Thompson, as its next CEOMark Thompson’s big unknown as NYT CEO: Revenue-buildingNYT’s choice of Mark Thompson as CEO signals changes ahead for company

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