* Geffen offered to buy Harbinger's NY Times stake-source
* Geffen bid market price, Harbinger wanted premium-source
* Geffen, Harbinger not in talks now-source
* Google looked at New York Times but passed-Fortune.com
(Adds value of stake, background)
By Sue Zeidler
LOS ANGELES, May 11 Media mogul David Geffen
offered to buy a 19 percent stake in the New York Times Co
(NYT.N) held by hedge fund Harbinger Capital Partners but was
rejected, a source with knowledge of the matter said on
Geffen offered to buy the stake at market price. Harbinger
fund manager Philip Falcone wanted a premium, according to the
source. The two sides are not currently in talks, said the
source, who spoke on condition of anonymity.
Harbinger owned 19.94 percent of the Times Co as of March
6, or 28.5 million shares. At Monday's closing price of $6.81,
the stake would be valued at about $194 million, far less than
the $500 million that Harbinger paid.
Interest in Harbinger's stake in the Times Company has
grown as the investment fund reels from losses in its funds.
Times shares have fallen along with other newspaper stocks,
hurt by the slump in advertising spending and by circulation
declines as readers turn to the Internet for free news and
Separately, Fortune reported that Web entrepreneur Scott
Galloway, one of two directors Harbinger nominated to the Times
Company board, made an overture to Google Inc (GOOG.O)
co-founder Larry Page about Google buying the Times a few weeks
before Geffen's offer, Fortune reported.
According to Fortune, Google "looked seriously" at the
opportunity but passed.
Any person or company who would want to buy the Times
Company would have to get approval of a trust controlled by the
Ochs-Sulzberger family, which controls the publisher through a
special class of shares.
The Times, burdened by heavy debt and falling revenue, is
trying to cut costs and sell assets, such as its stake in the
holding company that owns the Boston Red Sox baseball team.
Earlier in May, the publisher reached a deal with
unionized workers at its Boston Globe newspaper to cut wages
and eliminate lifetime job guarantees. [ID:nN06535991]
Galloway and New York Times spokeswoman Catherine Mathis
declined to comment.
(Reporting by Sue Zeidler. Additional reporting by Robert
MacMillan and Anupreeta Das in New York; editing by Tiffany Wu
and Steve Orlofsky)