NY Times Confirms About.com Sale Process, Sort Of

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