Chicago-based Tribune Co. announced Tuesday that, based on preliminary results of a buyback plan, it had bought back 15% of its outstanding stock, or 45 million shares, at a price of $32.50 per share. The buyback offer expired at midnight Monday.
In a statement, Dennis FitzSimons, Tribune chairman, president and CEO, said, "This leveraged buyout represents a very meaningful step in our plan to enhance value for shareholders."
The buyback price was more than $2 a share better than the $30.31 that Tribune closed on June 7, the day the offer was announced. At that time, that was Tribune stock's best performance in more than two months.
Tribune on Tuesday also said that, on July 12, it will purchase 10 million more shares owned by two Tribune-related foundations and also begin to buy back an additional 20 million shares on the open market.
The Tribune buyback, announced in early June, drew fire from the Chandler family, descendants of the family that had started Times Mirror Co., which Tribune acquired in 2000. The family said the company should have more actively sought other efficiencies, or broken up the company before embarking on a leveraged buyback. But others believe the Chandler family wanted to restructure the partnership they have with Tribune before the buyback plan went ahead.
Media watchers had been following the situation with rapt attention because the earlier sale of Knight Ridder newspapers suggested that investors were losing interest in print-heavy media companies like Tribune, which owns the Chicago Tribune, Los Angeles Times, Newsday on Long Island and the Hartford Courant among others, in addition to 24 television stations. (In the last month, Tribune has announced the sale of two stations, in Atlanta and Albany, N.Y.) The company says it will find $500 million in savings in conjunction with the buyback.
Since the merger of Times Mirror and Tribune, hoped-for advertising synergies haven't shown much progress. Tribune has believed that, by owning print and TV stations in major markets, it could put together attractive national-advertising packages.