Media General will work with Harbinger directors
NEW YORK (Reuters) - Newspaper and television company Media General Inc (MEG.N) said on Thursday it will work with three directors proposed by dissident shareholder Harbinger Capital Partners if they are elected to the board.
Media General shares rose as much as 6 percent after Chief Executive Marshall Morton made the comments, although the company stood by its recommendation that shareholders vote only for its own nominees at an April 24 meeting.
"If they're elected directors, we'll work with them," he said of Harbinger's nominees. "We're civil people by nature."
Morton spoke during a conference call to discuss Media General's financial performance. The company posted a wider quarterly loss as a nationwide housing crisis eroded advertising in Florida, where it publishes the Tampa Tribune.
The results were also hurt by a loss from discontinued operations -- the planned sale of five television stations.
Harbinger owns 18.2 percent of Media General's publicly traded shares and has argued the company should cut publishing costs more aggressively and consider lowering its divided to pay down more debt. It has won some support from two proxy advisory firms and Media General investor Mario Gabelli.
Morton has described Harbinger's ideas for ushering the company through tough economic times as "not workable or usable." On Thursday, he said he was still not convinced by their strategy.
"We don't agree with the approaches that they have taken and we've said that and Harbinger understands that," he added. "But that doesn't mean they won't have ... their opportunity to say what was on their mind at meetings. Of course we would listen."
The company's first-quarter net loss was $20.3 million, or 91 cents a share, compared with a loss of $6.5 million, or 27 cents a share, a year earlier.
Media General posted a loss of 44 cents per share from continuing operations. Analysts' average forecast was a loss of 46 cents per share, according to Reuters Estimates.
Revenue fell to $194.5 million from $218.3 million. Analysts on average had expected $205.87 million.
HARBINGER WINS SOME SUPPORT
On Thursday, Morton cited new steps to cut costs, including reducing capital expenditures to $25 million for 2008 from an earlier plan of $45 million, and offering buyouts to about half of its 1,300 employees in the Florida Communications Group, which includes the Tampa newspaper.
Proxy advisory firm Glass Lewis & Co said this week it supported one Harbinger nominee, while RiskMetrics recommended electing two of its candidates.
But Proxy Governance urged shareholders to back Media General's own slate, saying it doubted the Harbinger directors had the time or experience to make a real difference. Continued...
