Tribune shareholders OK buyout amid market fears

Financing, FCC hurdles up next

Tribune Co. shareholders voted Tuesday to approve an $8.2 billion buyout that some investors doubt will happen because of a suddenly tight credit market that makes borrowing more difficult than it had been months ago when the deal was struck.

The company said that of the 65% of the total shares entitled to a vote, 97% voted in favor of the deal that will make Tribune employee-owned, with Chicago billionaire Sam Zell getting an option to buy a 40% stake.

Tribune already has bought back half of its outstanding stock, and the deal struck in April calls for it to buy back the rest in the fourth quarter at $34 a share. Nevertheless, shares traded at $27.98 on Tuesday and rose to $29 after hours, suggesting Wall Street's skepticism that the transaction will close under the current terms.

In fact, after the stock traded near the $34 buyout price throughout April and much of May, it headed steadily south until bouncing off a nine-year low earlier this month.

The deal depends on an additional $4.2 billion in financing that Zell indicated Tuesday he is confident will be provided by lenders as planned.

"Despite the recent upheaval in the credit markets, my view of the company as an investment has not changed," he said.

Assuming all goes well with the financing, the transaction also needs the blessing of the FCC, which would need to relax its rules restricting the single ownership of TV stations and newspapers in the same markets.

Tribune owns 23 television stations, including Chicago's Superstation WGN, as well as such newspapers as the Los Angeles Times, Chicago Tribune, Newsday in Long Island, N.Y., and the Chicago Cubs baseball team.

"We're please that Tribune shareholders recognize the value of this transaction and have voted overwhelmingly to approve it," CEO Dennis FitzSimons said. "With financing fully committed, we anticipate closing the transaction in the fourth quarter, following the FCC approval and satisfaction of the other closing conditions."