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Thursday, March 29, 2007

Tribune Sale

How Zell's offer for Tribune might work - Los Angeles Times
An executive within Tribune said the board was scheduled to meet Friday and was expected to announce a deal with Zell that day. Financial news site TheStreet.com reported Wednesday that Los Angeles billionaires Eli Broad and Ron Burkle, who complained last weekend that Tribune was giving their bid short shrift, had resumed talking with Tribune and could make a counter-bid before the deadline. Broad and Burkle did not return phone calls seeking comment.

Judge halts sale of Advocate - The Advocate
Tribune did not require Gannett to honor the contract as it was supposed to, according to an attorney for Local 2110 of the United Auto Workers, which represents photographers and reporters in the Stamford newsroom. The attorney, Thomas Meiklejohn, said that had the sale been allowed, those employees benefits, wages and job security would no longer be protected by the union contract.

Tribune Debt May Sink Zell - New York Post
Other recent newspaper buyers have been caught off guard by how fast the newspaper industry is deteriorating, as cable and the Internet continue to woo away readers and advertisers. Not long after acquiring the Philadelphia Inquirer last year, for instance, public relations mogul Brian Tierney was concerned about his ability to make debt payments and ended up making newsroom cuts to conserve cash.

L.A. Times May Have Dumped Grazer - New York Observer
“I should have followed Dean out the door,” said Mr. Martinez on March 24, two days after he did follow Mr. Baquet out the door with his resignation from the editorial-page job. “I was nine-tenths of the way there.”

The betting still favors a Sam Zell acquisition - LA Biz Observed
Meanwhile, a Tribune executive told the LAT that the board was set to meet tomorrow and announce the Zell deal later in the day.

Work, work, work - Walks Clog the Bases
It's looking more and more like Sam Zell's going to "win" the "battle" for the Tribune Company (he's the only bidder; it's not much of a competition here). What I've been trying to do is figure out why he's using an ESOP (employee stock ownership plan) structure. Given his stated intention of not breaking up TRB into TV and newspaper assets, there shouldn't be a big tax hit anyway. But all the articles I've read have suggested that Sam Zell's ESOP structure would avoid taxes. That leaves two options: 1) there are incremental tax advantages to an ESOP structure that I'm not seeing or 2) Sam can't do the deal without having the employees contribute equity through the ESOP.

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