Trading of Tribune stock before merger news probed

Chicago board confirms review of option activity


March 18, 2000|By NEWSDAY

The Chicago Board Options Exchange confirmed yesterday that it is investigating a flurry of trading activity in Tribune Co. stock and options that took place three days before the company announced that it was buying Times Mirror Co.

Tribune announced the $6.4 billion deal Monday, but the previous Friday (March 10) about 1.7 million Tribune shares were traded on the New York Stock Exchange, more than double the stock's average daily volume for the past six months.

The CBOE said 146 options on Tribune stock were traded March 10, as opposed to 23 and 47 the previous two days. An option contract carries the right to buy or sell 100 shares of stock at a set price by a set date.

Tribune stock lost about 17 percent of its value after the deal was announced. The stock closed Monday at $30.81, compared with $37.18 on March 10. Tribune stock has since rebounded. Times Mirror stock soared after the announcement. It closed yesterday at a 52-week high of $93.50.

David Gray, a CBOE spokesman, described the review as routine. Katherine Sopranos, a Tribune spokeswoman, declined to comment.

Tribune agreed to buy Times Mirror, which owns the Los Angeles Times, Newsday, The Baltimore Sun and other East Coast newspapers. Tribune owns the Chicago Tribune, the Chicago Cubs baseball team, TV and radio stations, Web sites and other newspapers.

Pub Date: 3/18/00

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