- The Washington Times - Thursday, September 21, 2006

CHICAGO (AP) — Tribune Co. announced last night that it is restructuring two complex partnerships with the Chandler family, its largest single shareholder, in order for the struggling media company to pursue new initiatives.

Following a much-anticipated meeting of its board of directors, the newspaper and TV station owner also said the board named an independent special committee to oversee strategic actions that management expects to take by the end of this year.

The partnerships with the Chandlers, the former owner of Tribune’s Los Angeles Times, had been widely expected to be dissolved following negotiations between the company and the Chandler Trusts.

Instead, the Chandlers will retain 95 percent interest in the partnerships and will increase their holdings of Tribune common stock to approximately 48.7 million shares from approximately 36.9 million, Tribune said in an evening statement.

The partnerships contain an estimated $3.5 billion in assets and have hampered Tribune’s ability to make transactions because of major tax consequences.

“Today’s actions, along with our performance improvement plan, are consistent with our overall objective to generate the most value for all Tribune shareholders,” said Chairman and Chief Executive Officer Dennis FitzSimons.

Under the terms of the restructuring, Tribune will receive distributions of all of the Tribune preferred stock — which currently is owned by the partnerships — and approximately 39.5 million shares of the 51.3 million Tribune common stock held by the partnerships.

Tribune also will receive the right to buy the real estate owned by the partnerships in January 2008 for $175 million. The partnerships currently own real estate used by the Los Angeles Times, Newsday, Baltimore Sun and Hartford Courant newspapers, and various other investments.

The two partnerships were created in 1997 and 1999 by the Chandler Trusts and Times Mirror Co., which Tribune bought from the Chandlers in 2000. They enabled the Chandlers to diversify their Times Mirror holdings through a tax-free swap.

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