The New York Times Co. finally agreed to a truce with two activist hedge funds on Monday, agreeing to allow two more directors to be nominated to its board of directors.
Since December, the hedge funds, Harbinger Capital Partners and Firebrand Partners, have acquired a 19% stake in the publishing company, making them the largest shareholders.
Under the agreement reached yesterday, the number of directors on the Gray Lady’s board will increase from 13 to 15 at the company’s annual meeting next month. In return for that gesture, Harbinger and Firebrand have agreed to stop their campaign to nominate four directors to the board.
The two new board nominees are Scott Galloway, a New York University marketing professor, and James Kohlberg, co-founder of the eponymous investment firm.
The two activist hedge funds say that the Times need to get rid of assets outside of its core newspaper and focus instead on its online businesses.
In a recent statement filed with the Securities and Exchange Commission, Harbinger said, “the future of The New York Times depends on the willingness of its management and board to take bold action to adapt to the changing media landscape.”
Meanwhile, Harbinger and Firebrand have repeatedly said they are not interested in changing the company’s dual share class system, which gives the Sulzberger family control of nine of current 13 board seats. An effort last year by Morgan Stanley Investment Management to do so failed, but more than 42% of Class A votes were withheld in a sign of shareholder unhappiness with the Times.
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