New York Times Buyout Rumors Spark Heavy Wall Street Activity

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NY Times options turn busy on revived buyout talk [Reuters]

Summary: In the midst of restructuring, the New York Times (NYT) has entered the rumor mill as speculation the company would be sold swirled throughout Wall Street yesterday. Shares closed up nearly a dollar, or 4.19%, in composite trading yesterday. The takeover rumors have increased the price for the company's credit default swaps, which jumped by 10 basis points yesterday to about 62.5 basis points, or $62,500 to insure $10 million in debt. Pete Najarian, co-founder of Web information site insideoptions.com, noticed increased options activity surrounding Times' stock yesterday as investors hope to profit from NYT shares should they succeed in climbing above $25 before the end of November (or should they fail). "The activity in the options market certainly grabbed attention," Najarian said. Shares closed at $23.86 yesterday, then gained an additional $0.09 in after hours trading. Yesterday, according to market research firm Track Data, a total of more than 8,500 calls and 2,957 puts changed hands in NYT shares - considerably more than the average volume of 242 contracts.
Related links: • The New York Times Company Q2 2006 Earnings Conference Call Transcript • Why Google Didn't Buy the New York Times • Real Value Remains In New York Times, But Is the Will There? • Cramer's Take on NYT • Chart: Diversified Media Stocks - Annual Earnings Growth • Options, Credit Markets Move on N.Y. Times LBO Speculation
Potentially impacted stocks and ETFs: New York Times (NYT), Gannett (GCI), Knight-Ridder (KRI), The McClatchy Company (MNI), Tribune Company (TRB), Washington Post (WPO)

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Comments

[James Marsh:]

before everyone gets in a lather about yet another rumor that New York Times is getting taken out, pls peruse the company's Proxy (link below for your convenience). Flip to page 4 and read about the 1997 Trusts that control 88% of the supervote shares at NYT. The primary purpose of the Trust is to maintain the independence of the New York Times newspaper. It will be hard for the trustees to accept an offer when the purpose of the trust is so clear.

www.nytco.com/pdf-repo...'

2006 Oct 13 08:52 AM