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Friday, June 16, 2006

Tribune Won't Deviate From Buyback Plan

Maya Roney
06.16.06, 10:45 AM ET
Forbes

Tribune Co. is unlikely to deviate from its stock buyback plan despite dissent from the Chandler family, a major shareholder, according to a report from UBS Investment Research.

On Thursday, UBS maintained a "hold" rating on Tribune, after the Chandler Family trust, Tribune's second-largest shareholder, came out against the media firm's $2-billion stock buyback plan and pushed for a breakup or sale of the company.

"We do not expect management at Tribune to follow the same path as that of Knight-Ridder," wrote UBS analyst Brian Shipman. "Rather, we believe management will retain its current buyback plan."

Last fall, Knight-Ridder the second-largest newspaper publisher in the country after Gannett (nyse: GCI - news - people ), was forced to put itself up for sale after a revolt by its three largest shareholders. McClatchy Co. is buying Knight Ridder and selling 12 of Knight-Ridder's 32 papers to other parties.

In a regulatory filing, the Chandler Trust disclosed that they do not intend to tender any shares in response to Tribune's share repurchase announcement.

The Chandlers instead suggested the company seek strategic alternatives to the current business model, possibly including splitting up the newspaper and broadcasting assets or even a sale of the company.

The Chandlers do not currently hold a control position, and management's current share repurchase plan has received approval from the majority of directors. If the company were to breakup, the analyst estimates its value in the $34 to $37 per share range.

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