Tribune Accepts Buyout Offer From Zell, To Sell Chicago Cubs
Tribune Co. has accepted a buyout offer from real estate investor Sam Zell in a deal valued at $34 a share or about $8.2 billion, the media company said today.
Zell plans to invest $315 million in the deal for the Chicago-based media company and also plans to sell the Chicago Cubs at the end of this baseball season.
Zell will eventually become chairman of Tribune's board when the deal is complete sometime in the fourth quarter.
Tribune said the buyout will be conducted as a two-part deal. The first stage, expected to be completed in the second quarter, will involve a cash tender offer of $34 a share for 126 million shares, more than half of the outstanding Tribune shares. The remaining shares will be purchased later at the same $34 a share price.
Tribune has about 240 million shares outstanding, according to a regulatory filing.
Tribune began a strategic review in September under pressure from the Chandler family, its largest shareholder. Newspaper companies have been under pressure as they have been losing readers and advertisers to the Internet.
The company's board reportedly spent much of the weekend sifting through the two competing offers from Zell and from Los Angeles billionaires Eli Broad and Ron Burkle.
Zell, 65, made his fortune reviving moribund real estate. After a bidding war culminated in February, he sold his company, Equity Office, to the private equity firm Blackstone Group for $23 billion.
He has said he has no plans to break up Tribune, which is the nation's second-largest newspaper publisher by circulation.
Cubs Could Fetch $600 Million or More
Analysts have estimated the Cubs could fetch $600 million or more. Tribune bought the team in 1981 for $20.5 million.
"The Cubs have been an important part of Tribune for more than 25 years and are one of the most storied franchises in all of sports," said Dennis FitzSimons, Tribune chairman, president and chief executive officer. "In our last season of ownership, the team has one mission, and that is to win for our great fans."
Tribune said the company's 25% interest in Comcast SportsNetChicago would be part of the sale package.