Tribune Co. Asset-Shedding Well Underway, SEC Filing Shows

By: Mark Fitzgerald and The Associated Press Making good on its pledge to shed a half-billion dollars in assets, Tribune Co. reported late Thursday in a regulatory filing that it has agreed to sell $84 million worth in recent weeks.

Among those assets is the previously reported sale of its corporate jet. In the filing with the U.S. Securities and Exchange Commission (SEC), Tribune disclosed for the first time the jet sold for $32 million, and that the company will record a pretax gain of $7 million in the fourth quarter of 2006.

This Monday, the filing revealed, Tribune sold its San Fernando Valley printing facility land and building for net proceeds of $24 million.

And with the Oct. 6 purchase of BrassRing LLC, a "provider of talent management solutions," by Kenexa Corporation, Tribune expects to realize net proceeds of $28 million for it 27% stake in the company. BrassRing is co-owned by Tribune, The Washington Post Co., Gannett Co., Inc. and Accel Partners, the SEC filing said. The sale is expected to close in the fourth quarter of 2006.

The sale comes amid reports that Tribune has signaled that it is wiling to sell off individual assets including the Los Angeles Times or the Chicago Cubs baseball team because non-binding bids for the entire media giant reportedly came in too low.

Reports from several newspapers said the per-share bids were in the range of the low $30, about the current trading range. Tribune shares were $32.12, down $0.14, at 9:38 EST Friday. The share price had fallen 34 percent in the past three years.

The Tribune appointed a special board committee in September to find ways to increase shareholder value, including selling some or all of its assets.

Industry observers say the Tribune could get more money if the company is broken up than if it is sold whole.

"The pieces are worth far more than the whole," said Lawrence Adelman, managing director of the restructuring advisory firm AEG Partners. "You have a baseball team, you have television stations, you have radio and newsprint. It appeals to a lot of different buyers."

Benchmark Co. analyst Edward Atorino agreed that while selling off the company in pieces "will complicate things," it's the way to go.

"If they want to get a better price, they should sell in pieces," Atorino said, adding that newspaper sales have been good. He compared buying up media properties in Los Angeles, New York, and Chicago to buying beachfront property -- it doesn't come on the market very often. "It would attract a horde of bidders."

Like Knight Ridder Inc., the newspaper publisher that sold itself off earlier this year, Tribune is under pressure to boost a persistently lagging stock price that reflects its newspapers' slump, as readers and advertisers migrate to the Internet.

So far, according to the Tribune's flagship paper, three investor groups have submitted preliminary, nonbinding bids for the company.

One group consists of Fort Worth-based Texas Pacific Group and Boston-based Thomas H. Lee Partners. The other bids came from Boston-based Bain Capital and an alliance made up of Chicago's Madison Dearborn Partners, New York-based Apollo Management and Rhode Island-based Providence Equity Partners.

Tribune owns 11 daily newspapers, 25 television stations, Superstation WGN and WGN-AM radio, along with Web sites.

Local buyers have expressed interest in Tribune's newspaper properties, such as the Los Angeles Times, the Baltimore Sun, The Hartford Courant, and Newsday.

Among the pieces, analyst Dave Novosel of the Gimme Credit research firm suspects would be the first to go are Tribune's TV stations, which industry estimates peg as worth as much as $4 billion.