Tribune completes phase one of buyout


Yesterday was the deadline for shareholders to tender their shares for 34 bucks each in cash, a total of 4.3 billion, in phase one of the plan to take Tribune Company private. Phase two, which will result in a complete change of ownership transferring 100% of the company to Sam Zell and a new Employee Stock Ownership Plan (ESOP), is awaiting FCC action on license transfers and requests for crossownership waivers.

A California judge on Tuesday refused to issue an injunction which would have blocked the tender offer from closing, however the same court had earlier refused to throw out the lawsuit by a shareholder who claims the tender offer contains improper coercive aspects and accuses the company of failing to maximize shareholder value in the deal to buy out the public shareholders.

TVBR observation: It is virtually guaranteed that the initial tender for 126 million shares will be oversubscribed. That's all that Zell and the ESOP can acquire until the FCC acts, so it is likely that many shareholders will have part of their tendered stakes cashed out, but remain Tribune shareholders for a while longer with the remainder of their shares.