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Media

NY Times Confirms About.com Sale Process, Sort Of

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By Jon C. Ogg Updated Published
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The New York Times Company (NYSE: NYT) has confirmed that it is in discussions regarding the sale of its About.com unit.  The confirmation is on earlier reports that the newspaper and media player has been looking for a way to shed the high-volume and low-cost content provider.  Reports today have reported that Answers.com is the likely buyer under a letter of intent for some $270 million or so.  The New York Times will be taking a hit here as the purchase price was more than $400 million back in 2005.  It recently took a $195 million goodwill write-down to better reflect the new implied value of the About.com unit.

Again, no names have been offered up and no terms have been said.  The New York Times only confirmed that a discussion was taking place but said, “No definitive agreement has been reached. The negotiations are ongoing and there can be no assurances that an agreement will be reached or that a transaction will be completed.”

Shareholders like the news as the shares are up 6.7% at $8.62 on more than 2.4 million shares.  Believe it or not, that is twice the normal trading volume and today’s high and current price marked a 52-week high versus a prior 52-week range of $5.50 to $8.46.

Do not think that this can be forced by an outsider who is not already inside the company.  The New York Times is one of the dozen or so companies where we have warned that shareholders have no power at all when it comes to votes and effecting change inside of the corporate governance.

JON C. OGG

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About the Author Jon C. Ogg →

Jon Ogg has been a financial news analyst since 1997. Mr. Ogg set up one of the first audio squawk box services for traders called TTN, which he sold in 2003. He has previously worked as a licensed broker to some of the top U.S. and E.U. financial institutions, managed capital, and has raised private capital at the seed and venture stage. He has lived in Copenhagen, Denmark, as well as New York and Chicago, and he now lives in Houston, Texas. Jon received a Bachelor of Business Administration in finance at University of Houston in 1992. www.247wallst.com.

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