News on Nov. 22 that advertising revenue for newspapers dropped 1.5% in the third quarter didn't faze the New York Times' decision to reject an offer for the Boston Globe from a group of Boston investors spearheaded by former General Electric CEO Jack Welch. The Boston Globe reports that according to a Nov. 17 letter, New York Times chief executive Janet Robinson said her company was not interested in selling the newspaper. Could it have been the price of between $550 million to $600 million that Welch might have been rumored to offer for the Globe that turned off the Times? After all, the Times had paid $1.1 billion for the Globe in 1993. Welch's valuation was based on an analysis done by J.P. Morgan Chase & Co. for his investor group that includes Boston advertising executive Jack Connors and Boston concessionaire Joe O'Donnell. Despite the rejection, the trio will continue their pursuit of the Gray Lady. If the Times continues to see disappointing earnings results and major shareholders such as Morgan Stanley Investment Management, which owns 7.6% of the company, make louder overtures for change, don't be surprised if the Gray Lady at least goes to the negotiating table to see if it can get close to its asking price. At this rate, however, with circulation falling 7% and falling ad revenue at the Globe, maybe $550 million to $600 million isn't a bad price after all ...
See Boston Globe article
See Oct. 31 Dealscape entry
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