UPDATE 1-Geffen offered to buy NY Times stake-source

* 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 (Adds value of stake, background)

By Sue Zeidler

LOS ANGELES, May 11 (Reuters) - 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 Monday.

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 information.

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)