Tribune repurchasing up to $4.3 bil of shares

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CHICAGO -- Tribune Co. said Wednesday that it has begun the repurchase of up to $4.3 billion of common shares in an initial step toward the media conglomerate going private.

The nation's second-largest newspaper publisher is being acquired in an $8.2 billion deal by real estate tycoon Sam Zell.

The company will buy back up to 126 million common shares for $34 each in a previously announced tender offer. The number of shares represents more than 50% of Tribune's shares outstanding. The repurchase is being funded through bank debt and a $250 million investment from Zell which was carried out on Monday.

"With Sam Zell's initial investment completed, and the tender offer launched, the first stage of our transaction that will result in Tribune going private is under way," Chairman, President and Chief Executive Dennis FitzSimons said in a statement.

Shareholders can tender some or all of their shares at $34 per share in cash. The offer is not contingent on a minimum number of shares being tendered.

The Chandler Trusts, which hold about 20% of Tribune's outstanding stock, will tender all of the company's shares that it holds at the time the offer expires. Tribune's employee stock ownership plan and Zell will not tender any shares.

The tender offer will expire on May 24 unless extended.

Zell ultimately is to pay a final $500 million in order to control about 40% of the company, which will give him the largest individual stake while Tribune employees own the rest under the ESOP created by the agreement.

FitzSimons said in a note to employees Wednesday that Zell will join Tribune's board of directors no later than May 9. The billionaire is to become chairman when the deal closes in the fourth quarter.

Tribune owns 11 daily newspapers, 23 TV stations and the Chicago Cubs baseball team.

Shares in the company rose 39 cents, or 1.2%, to $32.94 in late morning trading on the New York Stock Exchange.
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