This is interesting. From the Wall Street Journal:
Harbinger Capital Partners Funds, a low-profile hedge fund managing $18 billion, nominated four candidates Friday for election to the board of New York Times Co. Together with another investor, Harbinger has 4.9% of the Times. The same day, it made a similar move on the Richmond, Va., newspaper and television-broadcasting concern Media General Inc., in which it has accumulated an 18.4% voting stake.
Why go after Media General? Under-performing stock, and a slew of assets that could possibly, and profitably, be spun-off:
Like the Times, Media General is family controlled and has faced pressure from discontented outside shareholders in recent years. It owns a chain of smaller newspapers in the Southeast, including the Tampa Tribune and Richmond Times-Dispatch, as well as 23 TV stations. The company has been hit hard by lower ad revenue in both its print and TV operations.
Management takes a decidedly Richmond attitude to the whole concept of outsiders seeking to change the company:
Media General Chief Executive Officer Marshall Morton noted in an interview yesterday that Harbinger’s proxy nominations were futile, as outside shareholders can elect only three of the nine seats on the board.
One-third control ain’t beanbag, Mr. Morton. But this quote strikes me as a corporate chieftain who is long overdue for seeking other employment:
“We’re an industry in transition,” he said. As for Harbinger, he said most investors who aren’t happy sell their stock and go on. “Why doesn’t he do that?” Mr. Morton added.
Many investors do that every day. But others, who think there is value in a company that the existing owners and their management team have either overlooked, or poorly developed, are eager to stay and fight for changes (and profits).
Given Media General’s two-tiered ownership structure, it is unlikely that any group of outsiders will be able to seize control of the company. Sometimes, though, all it takes is the threat of a takeover to make changes happen.
