In 1969 shares of the New York Times Company were listed on the New York Stock Exchange. To keep control of the newspaper, the Sulzberger family relied on a dual-class stock structure. It gave Class A shares some voting rights. But Class B shares – held largely in a family trust – gave the Sulzbergers the power to elect 70% of the board.
More than ever before, the family’s foresight seems vindicated, after Chinese millionaire Chen Guangbiao, who made his money recycling building materials, said he had made a “serious” effort to buy the newspaper.
Earlier this month Chen claimed to be ready to invest up to $1 billion to take control of the US newspaper and has been positioning himself as a white knight, telling the Global Times that a change of ownership will help to “repair the Times’ image in China” and adding that he will make it available “on every newsstand across the country”. (It has been blocked in China since late 2012.)
Reaction in the United States was muted, not least because Chen has no experience in the media world. Nor did he help his credibility by singing a five-minute song ‘My Chinese Dream’ at a press conference in New York or championing his cultural sensitivities by telling Sinovision, a TV channel, that he is “very good at working with Jews”.
Unsurprisingly the Sulzbergers haven’t commented on the bid, refusing even to sit down with the tycoon, who claimed to have flown to New York for a meeting.
As a result Chen seems to have changed course: he is now inquiring whether the Wall Street Journal is available for sale.
Readers of WiC may remember Chen, who made headlines last year by launching a line of cans containing nothing but air (see WiC183). The stunt aimed to raise awareness of air pollution problems in China and similarly the talk of him buying the New York Times was soon making news at home too. More patriotic netizens cheered Chen on although few treated the bid too seriously, seeing it as more a case of ‘mirage and attention’ than a ‘merger and acquisition’.
Xu Yili, a columnist for Sina Finance, was typically dismissive: “The New York Times’ dual-class stock structure effectively bars the company from a hostile takeover, which is what Chen wants to do. So rejection is totally expected. If this is not a publicity stunt, what is?”
“The art of advertising is to catch the attention of people. Without a doubt, Chen’s behaviour has successfully caught our attention. That also means his personal brand value has reached another new high,” an editorial at Daily Sunshine agreed.
News of Chen’s plan was then followed by Chinese bunmaker Goubuli’s announcing that it too is in the final stages of negotiations to acquire a “well-known” US coffee chain (for more about Goubuli’s buns see issue 213).
The target’s name wasn’t disclosed although Zhang Yansen, Goubuli’s chairman, said it has hundreds of outlets in 40 countries, leading to speculation that Dunkin Donuts or Coffee Bean & Tea Leaf might be up for sale (Starbucks, with a market value of $58 billion, was quickly ruled out). Dunkin Donuts – with a market cap of $5 billion – saw its shares edge up 1.7% on Nasdaq the day after Goubuli’s announcement.
But like Chen’s newspaper aspirations, analysts sounded sceptical about the coffee shop bid. For a start, Guobuli’s financial firepower is unclear. The privately-held company from Tianjin applied for a listing in China in 2012 but the deal was postponed as regulators shut off the IPO markets. Now Guobuli is expected to resurrect its listing plan and National Business Daily reckons that it is talking up the American bid to drum up interest for an IPO. “Even if the acquisition doesn’t go ahead, Goubuli has already won the attention of the market. That is definitely going to help when it lists on the A-share market,” one PR expert told the Beijing Times.
Chen is pretty unapologetic about self-promotion too, handing out business cards in New York with a series of splendid titles, including “Most Influential Person of China” and “Most Charismatic Philanthropist of China” reports the Daily Mail.
Interviewed by the Wall Street Journal, Chen acknowleged that his efforts to buy the New York Times had been rebuffed, and admitted too that he enjoys publicity stunts.
“Please remember one thing,” he added. “Whatever I say is true.”
© ChinTell Ltd. All rights reserved.
Exclusively sponsored by HSBC.
The Week in China website and the weekly magazine publications are owned and maintained by ChinTell Limited, Hong Kong. Neither HSBC nor any member of the HSBC group of companies ("HSBC") endorses the contents and/or is involved in selecting, creating or editing the contents of the Week in China website or the Week in China magazine. The views expressed in these publications are solely the views of ChinTell Limited and do not necessarily reflect the views or investment ideas of HSBC. No responsibility will therefore be assumed by HSBC for the contents of these publications or for the errors or omissions therein.