Tribune shareholders approve buyout led by Zell

By Ben Klayman

CHICAGO (Reuters) - Tribune Co. shareholders overwhelming approved a proposed $8.2 billion buyout led by real estate tycoon Sam Zell on Tuesday, giving a boost to the publisher amid investor fears that a deteriorating credit market would hamper the debt-heavy deal.

The company said 97 percent of votes represented by proxy favored the deal. Two percent opposed and 1 percent abstained.

Shares in the company rose 3.6 percent to close at $27.98, short of the $34 a share offered to shareholders, but above the nine-year low the shares hit last week.

Tribune, publisher of the Los Angeles Times and the Chicago Tribune, is going private under an agreement that will restructure it as an employee-owned company. Under the deal Zell would pay $315 million and get the option to buy a 40 percent stake in the company.

"If you were asked your opinion -- should I vote for something that would give me $34 for something currently valued at $27, what would your choice be? I can't believe that 2 percent opposed," Barrington Research analyst James Goss said.

The shareholder vote in Chicago took on an added significance for the deal, which calls for Tribune to take on $8.4 billion in new debt.

Some investors have questioned whether the deal's financing terms would have to be renegotiated due to the company's weak performance and deteriorating newspaper and credit markets.

Tribune Chief Executive Dennis FitzSimons said the terms remain unchanged. Zell said he continues to back the deal.