Tribune Accepts $8.2 Billion Buyout Offer
Monday, April 2nd 2007, 8:11 am
By: News On 6
CHICAGO (AP) _ Tribune Co. has accepted a buyout offer from real estate investor Sam Zell in a deal valued at about $8.2 billion, the owner of the Chicago Tribune, Los Angeles Times, TV stations and the Chicago Cubs said Monday.
Tribune said it also plans to sell the Cubs baseball team at the end of this season.
Zell plans to invest $315 million in the deal for the Chicago-based media company and will eventually become chairman of its board when the deal is complete sometime in the fourth quarter.
Tribune said the buyout will be conducted as a two-part deal. The first stage, expected to be completed in the second quarter, will involve a cash tender offer of $34 per share for 126 million shares, more than half of the outstanding Tribune shares. The remaining shares will be purchased later at the same $34 per share price.
Tribune has about 240 million shares outstanding, according to a regulatory filing.
Tribune began a strategic review in September under pressure from the Chandler family, its largest shareholder. Newspaper companies have been under pressure as they have been losing readers and advertisers to the Internet.
The company's board reportedly spent much of the weekend sifting through the two competing offers from Zell and from Los Angeles billionaires Eli Broad and Ron Burkle.
Zell, 65, made his fortune reviving moribund real estate. After a bidding war culminated in February, he sold his company, Equity Office, to the private equity firm Blackstone Group for $23 billion.
He has said he has no plans to break up Tribune, which is the nation's second-largest newspaper publisher by circulation.
Tribune shares rose 71 cents, or 2.2 percent, to $32.82 in premarket trading.