By: E&P Staff
Real estate mogul Sam Zell’s $8.2 billion deal to take Tribune Co. private should be blocked because top management and directors did not give good-faith consideration to the competing bid from Los Angeles billionaires Eli Broad and Ron Burkle, a lawsuit claims.
The lawsuit filed Thursday by Tribune shareholder Reed Simpson calls Zell’s offer of $34 a share for the Chicago media giant “grossly “grossly inadequate and unfair” in a lawsuit filed Cook County (Ill.) Circuit Court. The lawsuit was first reported in Friday’s Chicago Tribune by staff reporter Michael Higgins.
Simpson is seeking a court order to block the deal, and to pursue the lawsuit as a class action on behalf of other shareholders.
The Tribune account said Simpson alleges the company’s board “stood on both sides of the transaction and engaged in self-dealing and obtained for themselves personal benefits, including personal financial benefits, not shared equally” by other stockholders.
In a U.S. Securities and Exchange Commission filing late Thursday, Tribune revealed that 38 “key employees” are eligible for bonuses from a $6.5 million pool if the deal goes through. Directors also approved incentives for top management that could pay out as much as 8% of the Tribune’s value if the transaction — which will pile on nearly $13 billion in debt — is successful in the long term.