Tribune Stock Down Sharply On Reports Zell Deal May Be In Trouble

By: Mark Fitzgerald After weeks of steadily inching closer to the $34-a-share buyout level of Sam Zell's $8.5 billion deal to take Tribune Co. private, shares in the Chicago media giant fell sharply Wednesday morning on reports bankers are getting cold feet.

Shares of Tribune (NYSE: TRB) were down as much as 6% in early trading. As the noon hour approached, Tribune was trading at $31.92, down 1.39, or 4.17%, from its opening.

Tribune's flagship Chicago Tribune and its Los Angeles Times both reported that some bankers are balking on funding the final stage of the deal - which requires $4.2 billion in financing -- because they worry they will not be able to sell the loans and bonds in a weak credit market generally, and with growing skepticism about the Tribune transaction in particular.

Investors may also be reacting to Moody's downgrading of Tribune debt further into junk territory after markets closed Tuesday.