Media mogul David Geffen tried to buy a stake in the New York Times Co from 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, but Harbinger fund manager Philip Falcone wanted him to pay a premium, according to the source.

The two sides are not currently in talks, said the source, who spoke on condition of anonymity.

Fortune magazine first reported the news on its website in an article that said Times board member Scott Galloway, who was nominated by Harbinger, approached Google Inc co-founder Larry Page to try to get the Internet company to try to buy the Times.

Galloway and New York Times spokeswoman Catherine Mathis declined to comment.

Geffen's overture comes at a pivotal moment in the history of the New York Times Co, its namesake newspaper and the family that has controlled the company for 113 years.

One of the most venerated names in world journalism, the Times has fallen on hard financial times in recent years because of falling advertising revenue at its newspapers and looming debt payments that have forced it to borrow money at high interest rates.

Speculation is bubbling among media watchers that the Ochs-Sulzberger family might sell the paper rather than watch their empire shrivel. The move by the billionaire ex-movie producer and pop music label owner Geffen only fuels speculation that the family could bend to an attractive offer.

It also prompts speculation over whether Harbinger might give up its attempt to force the Times to change its business to survive in the 21st century. Interest in the stake has grown as the investment fund reels from losses in its funds.

Harbinger owned 19.94 percent of the Times Co as of March 6. 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 for it.

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.

Harbinger funded the fight against the Times, but its leader was Web entrepreneur Galloway, who convinced Falcone to front the money. To avoid a proxy battle, the Times expanded its board to allow Galloway and an ally on board.

The Times has made efforts to streamline its business, but Galloway's plan has proved a wash for Harbinger so far.

GOOGLE AND OTHER OPTIONS

Fortune reported that Galloway, several weeks before Harbinger's Geffen encounter, approached Google's Page about buying the Times Co -- a move that likely would cause a spike in the Times's stock price.

According to Fortune, Google looked seriously at the opportunity but passed. A Google spokesman declined to comment on what he called a rumor.

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.

Times Chairman Arthur Sulzberger Jr said as recently as April that the company is not for sale. It is trying to sell other properties and cut costs wherever it can, however.

It is looking for someone to buy its stake in the holding company that owns the Boston Red Sox baseball team, the Fenway Park ballfield and other properties in Boston.

Earlier in May, the publisher reached a deal with unionized workers at its Boston Globe newspaper to cut wages and eliminate lifetime job guarantees.

It said the Globe will lose $85 million this year, and got $20 million in cuts that it sought. The Times newspaper said the Times Co is trying to find a buyer for the paper.

(Additional reporting by Anupreeta Das in New York; editing by Tiffany Wu, Steve Orlofsky and Muralikumar Anantharaman)

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