New York Times might be buyout bait

There's certainly been lots of buyout talk regarding the New York Times. In fact, billionaire "Hank" Greenberg (who was the former CEO of AIG) is buying shares of the stock. He says he has no intention of buying the company (but, yes, things can change).

However, it would be tough to takeover the company. That is, the Sulzberger family has absolute control of the NY Times (because of a dual-class share structure). An investment wing of Morgan Stanley has been trying to get the family to relinquish its control.

But there's more: According to a BusinessWeek article, the chairman of the NY Times, Arthur O. Sulzberger Jr., has been exploring the idea of a leveraged buyout.

To get a deal done, there needs to be approval of six out of eight trustees who control the Class B shares. The problem? It means giving up lucrative dividends. Also, because of large amounts of debt required, the NY Times would be a much riskier operation.

Then again, there are obviously big problems for the newspaper industry – especially from web properties, such as Craigslist. In other words, over the next few years – assuming things continue to deteriorate for the newspaper industry – there may not be much in dividends to distribute anyway.

Tom Taulli is the author of various books, including the Complete M&A Handbook and operates DealProfiles.com.