Love Me Tender: Tribune Gets Big Response to Going-Private Offer

By: Mark Fitzgerald Tribune said Friday that almost twice as many shares were tendered by shareholders to its repurchase offer, the first part of its $8.2 billion deal to go private.

Tribune had offered to buy 126 million shares at $34 per share as the first step in the deal -- led by Chicago real estate mogul Sam Zell -- to go private through an ESOP (employee stock ownership plan).

But shareholders tendered about 224 million shares, representing approximately 92% of shares outstanding.

Among the shareholders dumping stock was the McCormick Foundation, which said in a U.S. Securities and Exchange Commission (SEC) filing late Thursday that it had decided to tender all its Tribune shares. The foundation, a trust established after the death of longtime Chicago Tribune Editor and Publisher Robert R. McCormick, holds a 11.6% stake in Tribune Co.

Tribune said because so many shares were offered they would be purchased on a pro-rata basis.

Separately, The Wall Street Journal reported Friday that Tribune to get the big loans to finance the first part of the two-part transaction to go private had to agree to pay higher interest rates than it had initially announced, and to repay some of the loans, which were all to run for seven years, within 18 months or two years.

Tribune sold more than $7 million in loans to fund the tender offer and refinance some debt. The going-private transaction, announced April 2, will saddle Tribune with some $13 billion in debt.

Among the steps Tribune is taking to pay down the debt is the sale of the Chicago Cubs after the current baseball season ends, and the sale of its stake in Comcast SportsNet Chicago, a cable TV operation.


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