Media General criticizes Harbinger board nominees
NEW YORK (Reuters) - Media General Inc urged shareholders on Wednesday to reject board candidates proposed by dissident investor Harbinger Capital Partners, saying the nominees are not good enough to guide the newspaper and television company.
"Your board of directors and I believe Harbinger's nominees are not well qualified and that its proposal is ill-advised and contrary to the interests of you and other Media General stockholders," Chief Executive Marshall Morton said in a letter to investors accompanying a proxy filing submitted to U.S. securities regulators on Wednesday.
In an interview with Reuters, Morton said that Media General will not offer board seats to Harbinger, as New York Times Co just did. He said Harbinger built up its stock presence while limiting its contact with the company, making for a more threatening dynamic. "It's akin to a brick-through-the-window kind of approach," he said.
Harbinger also has failed to say what it wants Media General to do to improve its business, Morton said. "We have yet to hear any concrete plans as to what they would have us do differently," he said.
Media General attacked the nominees for lacking newspaper or Internet experience and said that two of them have a history of being involved with Harbinger in similar, and ultimately unsuccessful, assaults on other companies.
Representatives for Harbinger were not immediately available for comment.
Media General's stance differs from that of the Times, which said on Monday it would support two of four nominees proposed by the fund and investment firm Firebrand Partners. It also sets the stage for a showdown at its April 24 annual meeting in Mechanicsville, Virginia.
Harbinger and its senior managing director, Philip Falcone, are the latest shareholders who have tried to rattle the U.S. newspaper business recently as it falters from years of falling advertising revenue and circulation.
Harbinger has built up an 18.2 percent stake in Media General and proposed a slate of three directors to its board. That stake was worth about $63 million based on Media General's closing price on Tuesday. It poured more than $500 million into a 19 percent stake in the Times in February.
Media General's shares have fallen 61 percent in the past year, reflecting a trend among most other U.S. newspaper publishers. Wider U.S. economic woes have stemmed advertising revenue flow to printed newspapers, while advertisers' interest has waned as they pursue opportunities on the Internet.
Media General has felt the heat, particularly in Florida where it publishes the Tampa Tribune. Falling home prices and other troubles in the U.S. housing market have hit publishers particularly hard in that state, driving down revenue from real estate advertising and hurting other parts of their business.
Morton said Media General is building up its Internet presence and, but Harbinger creates a distraction that could "seriously jeopardize the company's ability to build long-term, or even short-term, stockholder value."
The company's shares were up 1 cent to $15.57 in afternoon trade on the New York Stock Exchange after trading as high as $15.98 earlier.
(Editing by Gerald E. McCormick)
