Tribune says to decide its future by March end
By Megan Davies and Robert MacMillan
NEW YORK (Reuters) - Media group Tribune Co., which is reviewing alternatives that could split up the company or take it private, said on Tuesday it will decide on a course of action before the end of March.
"The review process has been rigorous and will continue to move forward with the assistance of our outside financial and legal advisers," lead independent director and special committee Chairman William Osborn wrote in a statement.
"The board expects to make a decision on a course of action and have an announcement before the end of the first quarter," he wrote.
Tribune is considering several bids, including an offer to go private, a recapitalization -- when a large amount of debt is taken on to buy a company's stock -- and a sale of its television stations, sources have told Reuters.
It also may reject those offers and act on its own. It could keep the newspapers, sell the broadcast group, including 23 TV stations, and give holders a dividend, analysts have previously said.
The drawn-out auction for Tribune, whose properties include the Los Angeles Times and the Chicago Cubs professional baseball team, was sparked by its largest shareholder, the Chandler Trusts, which urged the company in June to break itself up or consider a sale.
Tribune set a second deadline for bids for January 17 after an initial round drew scant interest.
The Chandler Trusts has proposed taking the company private in a deal valuing Tribune at $7.6 billion, or $31.70 a share. Under the deal, the Chandlers would buy Tribune's newspaper business, including 11 daily newspapers, and spin off its broadcasting unit.
A rival bid from Los Angeles billionaires Eli Broad and Ron Burkle valued Tribune at $34 a share, including a $27 dividend and equity valued at $7 a share, said a second source at the time of the bid deadline in January.
A third bid -- just for the TV station assets -- came from private equity firm Carlyle Group, a source told Reuters in January.
Tribune's statement came at the end of two days of meetings. Tribune's special committee met on Monday while its board met for a regularly scheduled meeting on Tuesday, a source familiar with the situation said earlier today.
The special committee will make a recommendation of the course of action to take to Tribune's board of directors, the company said in the statement.
Tribune also said on Tuesday it would pay a regular quarterly dividend of 18 cents a share.
The company last week posted a higher quarterly profit on Thursday, helped by an extra week in the quarter that boosted newspaper advertising sales, but forecast a continued drop in circulation revenue in 2007.
Tribune said net income in the fourth quarter rose to $239.1 million, or 99 cents a share, compared with $132.3 million, or 43 cents a share, a year ago.
Tribune shares rose 11 cents to $30.40 Tuesday on the New York Stock Exchange.
Reuters/Nielsen
