Tribune Tenders More Shares Than Anticipated

Tribune said Friday that nearly twice as many shareholders as expected agreed to take $34 per share in cash in its tender offer -- the first formal step in the company going private under a buyout led by billionaire investor Sam Zell.

But its stock fell following a report that Tribune had to agree to difficult borrowing terms in order to finance the offer.

Tribune, whose properties include the Chicago Tribune, the Los Angeles Times and 23 television stations, said a preliminary count showed 222 million shares were tendered before the offer expired Thursday, nearly double the 126 million shares the company was looking to buy.

The tender offer is one part of the complicated $8.2 billion transaction in which Zell is gaining control of Tribune, the nation's second-largest newspaper publisher. Tribune sold more than $7 billion in loans to finance it, but The Wall Street Journal reported Friday that the borrowing rates were steeper than expected.

Tribune agreed to pay higher interest rates than planned and pay down some of the debt within two years instead of the seven it was hoping for, the Journal said.

Merrill Lynch & Co., Citigroup Global Markets Inc., J.P. Morgan Securities Inc. and Banc of America Securities LLC served as co-dealer managers for the tender offer.

Tribune shares fell 95 cents, or 2.9 percent, to $32.25 in morning trading. The stock has ranged between $27.53 and $34.28 in the past year.