The New York Times Co., which put its Boston Globe newspaper up for sale this year, has agreed to sell the publication to John Henry, owner of the Boston Red Sox, for $70 million in cash.
The deal is expected to close in 30 to 60 days, the Times Co. said in a statement. The sale also includes the Globe website, the Worcester Telegram & Gazette and its Boston.com website, a 49% stake in Metro Boston and the Globe's direct-mail marketing company GlobeDirect, the statement said.
The Times Co. put the Globe up for sale in February and hired Evercore Partners to manage the process, part of an effort to focus on its flagship New York Times media brand. The Times Co., which bought the Globe for $1.1 billion 20 years ago, mostly in stock, is coping with an industry-wide decline in advertising that has caused a drop in sales and stock prices. Bids for the Globe were expected to be in the range of $100 million, people familiar with the matter said this year.
"As a result of this agreement, we will be able to sharpen our company focus on and investments in The New York Times brand and its journalism," New York Times CEO Mark Thompson said in the statement.
Interested parties included Rick Daniels, a former president of the Globe, and ex-Time Inc. CEO Jack Griffin, in partnership with cousins Steven and Ben Taylor, whose family once owned the newspaper, the people said.
Times Co. shares are up 40% this year, headed for the biggest annual advance since 2009.
The publisher, controlled by the Ochs-Sulzberger family, had worked on a plan to sell the Globe since 2012, when it received an unsolicited bid from Mr. Daniels, along with Heberden Ryan, a managing director of private-equity firm Boston Post Partners, a person familiar with the matter has said. While their bid was about $100 million, it included contingencies that made it less attractive, the person said.
The Times Co. has rebuffed proposals that exceeded $100 million in the past. In 2011, Freedom Communications Inc. CEO Aaron Kushner, publisher of the Orange County Register and other California papers, offered more than $300 million, according to another person familiar with the deal who asked not to be identified because the matter was private. His offer included the assumption of both qualified and unqualified pensions. The Times Co. turned down the offer because it didn't include enough cash up front, according to another person, who also requested not to be named because the talks weren't public.
The New England Media Group, the division that manages the Globe, has about $110 million in pension liabilities, people familiar with the matter said in June. The Times Co. preferred cash to help offset those liabilities, rather than bids that assume even part of them, one of the people said. Such bids would be less attractive because the Globe's pension liabilities would revert back to The Times Co. if a new owner of the Boston newspaper were to become insolvent, the people said.
~ Bloomberg News ~