Tribune reportedly considers Zell offer

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CHICAGO -- The Tribune Co. board of directors is considering an offer from real estate magnate Sam Zell to take the company private, but is leaning toward restructuring the company on its own, according to published reports.

Tribune, pressured by its long-slumping stock price, appointed a special board committee in September to review the company's prospective offers. The board intends to decide on a plan to increase shareholder value by the end of March, the company said.

The board would prefer a recapitalization plan involving a spinoff of Tribune's television stations and the payment of a bid dividend to shareholders, The Wall Street Journal reported Sunday on its Web site.

Zell's proposal would involve buying the entire company with the participation of an employee stock ownership plan, The New York Times reported for Monday editions. Although the deal would be highly leveraged, the employee stock plans have many tax advantages, including the ability to write off interest on debt, the Times reported, citing people close to the situation.

Zell's spokeswoman did not return telephone calls Sunday to The Associated Press, nor did Tribune spokesman Gary Weitman.

Zell approached Tribune Co. with a proposal to take over the company earlier this month as he was wrapping up a deal to divest himself of Equity Office Properties Trust. It was acquired by The Blackstone Group for $23 billion in cash.

The board committee is taking Zell seriously enough that it has slowed its deliberations, which continued over the weekend, to explore his proposals further, the Times reported.

The recapitalization plan could involve buying out part of the 20% stake in Tribune held by the Chandler family, the company's biggest shareholder and the instigator of the sale process, people familiar with the board's deliberations told the Journal.

One option is for the Robert R. McCormick Tribune Foundation, the company's second biggest shareholder, to use some of the money in a dividend payout to buy out part of the Chandler stake. The foundation and a related charity own about 14% of Tribune.

On Friday, Tribune reported its monthly revenues dropped 5% in January from a year earlier on declining ad and circulation revenues, lagging the rest of the industry. The company also saw a revenue decrease from its broadcasting and entertainment group.

Tribune, which owns 11 newspapers, including the Chicago Tribune and the Los Angeles Times, along with 23 television stations and the Chicago Cubs baseball team, said the revenue outlook for February is better in publishing and broadcast.
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