Tribune likely to try 'self-help' plan

Management is expected Saturday to ask the company's directors to review a reorganization and recapitalization.

By James Rainey, Times Staff Writer
3:22 PM PST, February 23, 2007

Excerpt

With no clear premium offered by a handful of bidders and its auction already extended once, Tribune management is expected Saturday to ask the company's directors to review a reorganization and recapitalization. The plan would split the company into separate broadcast and newspaper divisions, pay a dividend of up to $20 per share and sell two small Connecticut papers, according to two people familiar with the proposal.

[snip]

Several Tribune managers said they are anxious about the company's "self-help" proposal because, like Broad and Burkle's plan, it would require heavy borrowing to pay the large dividend. They worried the company would face new pressure from its lenders to cut costs and reduce staff. That situation could become even more severe if the company cannot find a way to take itself private and out of the reach of public shareholders.

One Tribune manager, who asked to remain anonymous so as not to anger his bosses, said: "It sounds like the worst of both worlds."

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