No Decision Yet On Tribune Co. Offers

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By: E&P Staff

The Tribune Company committee of independent directors mulling what can only be called disappointing offers for the Chicago media giant ended a highly anticipated meeting over the weekend — with no decision on its future.

“The committee is actively engaged in the review process,” William A. Osborn, Tribune’s lead independent director and chairman of the special committee, said in a statement. “Assisted by our outside legal and financial advisors, we are carefully considering all alternatives for creating additional shareholder value. These alternatives include potential transactions involving third parties as well as actions the company may take alone.”

Pressured by big stakeholders — including the Chandler family, which sold Times Mirror to the company seven years ago — who are disappointed with the performance of the company’s stock, Tribune first announced it the strategic review in September.

Despite this latest delay, the Tribune statement noted that “he board has said it expects to announce a decision during the first quarter of 2007.”

Three groups made offers for all or part of Tribune by the auction deadline last week, and none has excited Wall Street.

The Chandlers offered $31.70 per share for the company in a deal that would split the company in two. Shareholders would get $19.30 in cash for each share, plus shares in a new and separate broadcast company that the Chandlers valued at $12.40 per share.

Los Angeles billionaires Eli Broad and Ron Burkle made an offer valued at $34 per share, that includes a $27 per share dividend. To fund the dividend, Tribune would take on $9.8 billion in new debt.

Tribune stock closed Friday at $30.52.

The Carlyle Group, the Washington-based private equity group, offered about $4 billion for the broadcast properties only.

The Chicago Tribune, citing unnamed sources, reported Saturday that the company “may be leaning toward a so-called self-help strategy.”

Among the possibilities, the article by Michael Oneal reported, is taking on new debt for a special dividend, selling off the broadcast division, and taking the rest of the company private.

“Although many risks and hurdles are associated with these options, the sources said the self-help route had gained currency since the offers generated by Tribune’s auction were less than appealing,” the Tribune reported.

Sunday the Tribune said that “strategic buyers” are looking to buy parts of the company. Citing an unnamed source, the paper reported that Gannett Co., which had kicked Tribune’s tires early in the auction process, was looking at Tribune’s Stamford and Greenwich, Conn., newspapers.

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