DARK SKIES LOOM OVER TRIBUNE...CHANDLERS WANT TO SPLIT (WSJ, NYT, VAR, LAT)
By Stephen Saito
A day after private acrimony in the Tribune boardroom turned public, the Chandler family, the company�s second largest shareholder, attacked Tribune�s board with a letter slamming the company�s plan for a $2 billion stock buyback and calling for the company to split up.
Writes the Wall Street Journal:
The letter represented a bold but risky move by the Chandlers, who own 12% of Tribune shares and hold three of its 11 board seats, to win support for a fight to overhaul Tribune's strategy or even management. To show its intentions are serious, the family laid out a detailed blueprint for fixing the company and included data on revenue, profits and stock performance to bolster its view that Tribune is a laggard in its industry.
Still, the Chandlers could face embarrassment should other shareholders not lend their support. So far, few other holders have publicly joined their effort. Yesterday, Tribune shares closed up nearly 3%, at $31.94 each in 4 p.m. trading on the New York Stock Exchange -- still short of the top price of $32.50 a share that the company is paying in its buyback. Chicago-based Tribune runs a wide range of newspapers and broadcast properties, among them 26 TV stations, the Chicago Tribune and the Los Angeles Times.
Although Tribune�s CEO Dennis FitzSimons and director William A. Osborn issued statements that basically affirmed the status quo at the media conglomerate, talk of Californians who would be interested in buying the Los Angeles Times emerged, first reported in Monday�s L.A. Times.
Writes the New York Times:
Already, the conflict at Tribune has stirred interest among some wealthy Californians in The Times, the fourth-largest newspaper in the country. If sold, the paper could fetch more than $1 billion.
Potential buyers include Eli Broad, the philanthropist; Peter Ueberroth, the former baseball commissioner; Ron Burkle, head of the Yucaipa Company, an investment firm that recently expressed interest in buying some of the Knight Ridder newspapers; and David Geffen, the record executive. Some of them, notably Mr. Broad and Mr. Geffen, had expressed interest in the paper before the recent dispute.
The demand of the Chandlers for a special committee is likely to be met with resistance.
The New York Times also examines how the company could be broken up:
It was unlikely the Chandlers would be interested in buying assets like The Times outright, although they could roll their investment in Tribune into spinoffs should they happen, this person said.
Private equity firms, including Blackstone Group, Providence Equity and Thomas H. Lee Partners, have all expressed interest in Tribune's broadcasting unit, and perhaps the entire company, to the Chandlers and Tribune's advisers. But people close to those firms said they would probably only make an offer if they were invited to do so by Tribune's board.
The New York Times also spoke to Harry Chandler, a member of the family who has no direct ties to running the trust, who said that the family�s letter was �very out of character for the normally private and conservative trust board," a sentiment shared by most observers.
Related Links
Chandlers Treaten Proxy Fight Over 'Disastrous' Tribune Strategy (WSJ)At Tribune, a Call for a Split (NYT)
Divorce decree (VAR)
Tribune's Assets Seen as Big Lures for Bidders (LAT)
Chandlers demand breakup of Tribune (LAT)
