Sam Zell has gotten one necessary seal of approval for his 8.2B plan to privatize The Tribune Company. According to reports he won approval from 97% of eligible share-holding voters who took the recommendation of an approving proxy advisor. Now Zell has to line up financing and gain bureaucratic approval. Standard & Poors lowered ratings on the company, and said its rating will stay on CreditWatch with pending closure on 8.2B deal. According to the Associated Press, S&P downgraded Tribune’s corporate credit rating slightly from B+ to BB-, both of which are in the junk bond range. It will go down even further, to B with negative expectatations, upon closing, anticipating further reversals in newspaper revenue and circulation. Nevertheless, Proxy advisor Glass Lewis & Co. had advised approval and shareholders overwhelmingly took that advice – largely because the current stock price in the 27 dollar range makes Zell’s 34 dollar offer very attractive. According to AP, Tribune has borrowed 7B already, 1.5B of which must be repaid within two years, and needs another 4.2M to complete the acquisition. In addition to coming up with funding, the deal must gain FCC approval for the transfer of 23 television stations, and further, will require waivers to keep five television/newspaper local ownership combinations intact. One of those, in Chicago, also includes legendary clear channel boomer WGN-AM. The MLB Chicago Cubs are also located there but are already on the block to be sold.
