Tribune Shareholders Approve Buyout
Takeover Plan Must Still Hurdle Financing
By Jon Hemingway -- Broadcasting & Cable, 8/21/2007 9:18:00 AM
Tribune shareholders approved the proposed $8.2 billion leveraged buyout of the company by financier Sam Zell, with 97% voting in favor of the transaction by a preliminary count.
The deal now needs to gain regulatory approval and complete its financing.
Real estate mogul Zell agreed to take Tribune private in March and began the first leg of a complicated debt financing in May. The initial steps of the transaction included a tender for $4.3 billion of common stock at $34 per share and the refinancing of $2.8 billion in debt (funded by a $10.1 billion credit facility closed in June); an investment of $250 million by Zell; and the purchase by a newly created employee-stock-ownership plan of $250 million of newly issued Tribune stock. The tender for the remaining outstanding shares of Tribune will be funded by proceeds from the outstanding credit facility and an expected $2.1 billion bridge loan, which the company hopes to refinance in the bond market, as well as an additional investment by Zell.
Corporate-credit-rating agency Standard & Poor’s cut Tribune one notch Monday.
At the close of the deal, Zell will become chairman of Tribune’s board. The ESOP will hold all of Tribune’s outstanding common stock, and Zell will hold a subordinated note and a warrant entitling him to acquire 40% of Tribune’s common stock at an aggregate exercise price initially of $500 million.
Media giant Tribune is publisher of a portfolio of major newspapers, including the Chicago Tribune and the Los Angeles Times. The company also operates 23 television stations.
As part of the transaction, the company plans to sell its 25% stake in Comcast SportsNet Chicago and Major League Baseball’s Chicago Cubs after the close of the baseball season.
S&P Cuts Tribune Credit Ratings
08/20/2007Tribune Debt Gets Downgrade
08/23/2008Tribune: A Leaner, More Open Company
04/17/2008
