Tribune accepts buyout offer from Zell

Cory Bergman April 2nd, 2007

After months of deliberations, the Tribune Company has agreed to sell to real estate investor Sam Zell in an $8.2 billion deal that works out to $34 a share. At the end of the transaction — which will tap the employee stock ownership plan — Tribune will be a privately company with Zell as chairman. Zell has promised not to spin off Tribune’s TV stations, but he says he plans to sell the Chicago Cubs at the end of the season. “I am delighted to be associated with Tribune Company, which I believe is a world-class publishing and broadcasting enterprise,” Zell said. “As a long-term investor, I look forward to partnering with the management and employees as we build on the great heritage of Tribune Company.” Adds Dennis FitzSimons, Tribune chairman, president and chief executive officer: “As a private company, Tribune will have greater flexibility to transform our publishing/interactive and broadcasting businesses with an eye toward long-term growth.” Here’s the press release with all the details.

Adds Adam in comments: “There will be no growth after this transaction. With all this new debt all energy will go into cost cutting in order to service it. The television stations will be soon on the block in order to raise cash to repay debt.”