Wednesday, January 24, 2007

Morgan Stanley Disappointed After Share Class Proposal Rejected

In a 13D filing on New York Times (NYSE: NYT), large shareholder Morgan Stanley disclosed a letter send to the board after the company refused to include their shareholder proposal which would have put the fate of company's two-class share structure to a vote. The firm said they were disappointed in the action, saying, "by excluding the proposal from the proxy, the Company has left the Class A shareholders with limited avenues for expressing their dissatisfaction with the poor performance of the managers of their business."

The firm also said, "Ordinarily when we are dissatisfied with the management of a company in our portfolio, we sell our investment. However, The New York Times Company is an exceptional case. Barron's recently reported that several independent analysts have calculated that the Company's shares are worth 50% more than the current stock price. We also believe that the shares do not reflect the intrinsic value of the Company if it were managed and governed properly. After patiently holding the stock for more than ten years, we do not believe that we would be serving our clients' best interests if we sold at such a substantial discount to fair value."

Morgan also noted that at last year's annual meeting approximately 30% of Class A votes were withheld from Class A Directors, reflecting shareholder dissatisfaction. The firm said as another annual meeting approaches Class A shareholders must again consider whether to withhold their votes.

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