It takes a brave man to call the bottom for the US newspaper sector. But Carlos Slim, the Mexican billionaire, is giving it a shot with his decision to take a 6.4 per cent stake in the New York Times Company. Shares in the newspaper group on Thursday rose 7 per cent, extending a rally that began last week. Mr Slim’s presence on the register, alongside two activist funds with board level representation, will add to pressures facing the company for more radical restructuring. Even though the Sulzberger family wields control via their ownership of 90 per cent of the super-voting B-shares, these are demanding times for all media owners and none can afford to ignore the wishes of investors. The Sulzbergers, however, are as determined as ever not to relinquish control, not least perhaps because the top of the market is a distant memory.
The family that did catch that moment is, of course, the Bancroft dynasty. In the 17 months since Rupert Murdoch made his $5.3bn bid for Dow Jones, owner of the Wall Street Journal, a newswire and other businesses, newspaper stocks have crumpled. The Bancrofts may have held their noses when they took the News Corp shilling, but Mr Murdoch’s offer of a 71 per cent premium to Dow Jones’s pre-bid share price on April 16 2007 looked generous then – at 16 times consensus 2007 earnings before interest, tax, depreciation and amortisation and 40 times earnings – and quite simply beyond all avarice now. Shares in Gannett and McClatchy, two newspaper groups that Goldman Sachs in part relied on for its fairness opinion to the Dow Jones board, are down respectively 70 per cent and 89 per cent since Mr Murdoch lobbed in his offer. Mr Slim may prove to have better timing, but anyone hoping for a sustained surge in newspaper stocks will be disappointed.
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