Zell preps for takeover

Tribune Co. took the first step toward going private on Wednesday by launching its $4.3 billion stock buyback plan, outlined earlier this month when it accepted the $8.2 billion takeover bid from Chicago real estate kingpin Sam Zell.

Tribune launched a tender offer to buy back 126 million shares — more than 50% of Tribune’s outstanding stock — at $34 per share.

Move signals the start of the first phase of the two-step process that will take the Chicago-based TV and newspaper giant private by the end of the year. The tender offer repurchase will be funded by debt and a $250 million investment from Zell that closed on Monday.

After the Zell takeover was announced, there was much speculation that other suitors would come out of the woodwork with counteroffers, but the movement on the tender offer will go a long way toward cementing the Zell deal as a fait accompli.

The pact hinges on a complex financing scheme known as an Employee Stock Ownership Program in which Tribune’s 21,000 employees will become equity owners of the company.

Zell will join Tribune’s board of directors no later than May 9, and he will become chairman by year’s end after investing a total of $500 million in the company, Tribune said.

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