Carlos Slim

Carlos Slim has just infused some much-needed capital into the good grey New York Times - given it some "breathing room" as the saying goes.

Slim, the Mexican telecommunications billionaire, is lending the paper $250 million.

He is buying senior unsecured notes. They will be due in 2015 and will carry a 14.053% percent annual interest payment. Payments will be semi-annual.

The Times has the right to prepay the notes beginning in 2012.

Slim isn't an "activist investor." He appears uninterested in shaking up the operations of the company. Indeed, if there is a change of control during the pendency of these loans, it will trigger a “repurchase right” wherein Slim can require full repayment almost immediately. So the deal may be understood as entrenching the present control group.

The notes carry detachable warrants providing the right to buy up to 15.9 million shares of the Times Co.’s Class A stock at a strike price of $6.3572 a share. Slim, who already owns 6.4% of the company, could bring that stake up to 17% by converting these warrants, thereby making himself the third largest shareholder.

Slim doesn't get a board seat.

I don't know what to make of any of this, but I've chronicled the recent history of The New York Times in this blog and I'll continue to do so. I have a feeling that one way or another this transaction may in the fture be seen as a benchmark.

A 'beer war' after all?

InBev, the Brussels based company that has entered into an agreement to buy Anheuser-Busch, faces a rebellion at last -- coming from a perhaps-unexpected quarter, from Grupo Modelo and allies.

InBev and AB agreed on the terms of their combination in July. Shareholders of the target company are to get a sizeable premium over the price of their stock before the bid, and Budweiser (not Stella Artois) will be the flagship brand of the combined company.

The key fact for understanding the new development is this: AB owns half of the equity in a Mexican beer company, Grupo Modelo, best known for Corona.

GM has initiated an arbitration action against AB, claiming that the latter was obligated under a 1993 agreement to consult it before concluding a deal with InBev. The arbitration action has instigated rumors that what GM really wants is a chance to buy back that 50% share of its equity. But a spokeswoman for the Mexican company denied this to a reporter for Reuters Friday.

InBev has a statement out expressing confidence "that the claims made by Modelo [and related parties] are entirely without merit."

Anyway, if Grupo isn't seeking the opportunity to buy back AB's interest: what does it want? To throw a monkey wrench in the works of the still-unclosed deal entirely? To get a greenmail pay-out for the shareholders who own the other half of its equity? What?

The price of Grupo shares was flat Friday on the Mexican stock exchange. The price of AB shares rose slightly.