Friday, March 30, 2007

Tribune Employees Beware

With all the ado surrounding the sale of the Tribune Company it’s difficult if not impossible to read every story, but Fred Kirby brought one particular article by Katharine Q. Seelye to my attention. In paragraph nine of her story she writes:

“This could be particularly risky for Tribune employees, who have watched the value of their company sink in recent years. And because Mr. Zell’s plan involves a lot of debt, employees might also be asked to make concessions on wages or on pension contributions.”

As I have been preaching for many years, cut up your credit cards and find ways to trim your expenses, incase this comes to be. In the mean time, here are a few of the many stories on the blogosphere.

2 Billionaires Make Offer for Tribune - New York Times
The two investors said that like Mr. Zell, they would structure a deal based on an employee stock ownership plan, but would offer $34 a share, one dollar more than Mr. Zell’s bid. They also said they would put in $500 million of their own money, compared with Mr. Zell, who had planned to put in at least $300 million.

L.A. duo reenters Tribune auction - Los Angeles Times
The seesaw battle for Tribune Co. tilted again Thursday evening, when Los Angeles billionaires Eli Broad and Ron Burkle said they would pay $1 more a share than real estate mogul Sam Zell, who had been viewed as the front-runner to acquire the media company.Broad and Burkle made their offer as Chicago-based Tribune approached a self-imposed Saturday deadline to determine its fate. It reportedly had been on the verge of accepting a $33-a-share bid from Zell.

Burkle, Broad making $34-a-share, ESOP-based offer - Chicago Tribune
The source said Broad and Burkle's new proposal is worth $34 per share and includes a recapitalization funded, like Zell's plan, by an employee stock ownership plan, or ESOP. As in their previous offer, it would involve the two men investing $500 million in capital.It was not immediately clear what effect this late revision would have on the board's plans or timetable.Tribune Co., owner of the Chicago Tribune, Los Angeles Times, WGN-Ch. 9 and other media properties, as well as the Chicago Cubs baseball team, is coming up against a self-imposed Saturday deadline to announce a decision.

Tribune Suitor Zell Is Used to Bucking Trends - Wall Street Jounal
A last minute wrinkle: California businessmen Ron Burkle and Eli Broad have come up with a revised offer to beat Mr. Zell's $33-a-share proposal. According to someone familiar with their plans, the two men sent a letter last night to Tribune's board saying they are more than happy to structure a deal using an ESOP model. They value their new deal at $34 a share, including $500 million in cash, this person said, in exchange for warrants that deliver control of a 40% Tribune stake. Both the Zell and Burkle-Broad offers propose that the buyer would become chairman or co-chairmen of Tribune.

Revised Offer by Broad and Burkle - LA Biz Observed
The new offer was valued by Broad/Burkle at $34 a share and that the two billionaires would be willing to structure the deal with an employee stock ownership plan, just like the Sam Zell proposal.


Anonymous said...

Using my retirement money and there is nothing I can do about it, what a great system this is.

adam hartung said...

This transaction puts the very viability of both the Chicago Tribune and LATimes at risk. After years of cost cutting, all this additional debt insures no investment in transforming these companies into internet-savvy winners, but instead locking them into debt service that will rob them of any resources for transformation. Sam Zell takes a small risk looking for a big gain, while management pounds another nail in the coffin of these venerable institutions. More detail at