Tribune `on track' in stock buyback

June 21, 2006|By KURT BLUMENAU | KURT BLUMENAU,THE MORNING CALL

Tribune Co. is sticking with its $2 billion stock repurchase and will complete it next week, despite opposition from one of its largest shareholders, Tribune's top executive said yesterday.

Speaking at an industry conference in New York yesterday, Chief Executive Officer Dennis FitzSimons said the buyback announced May 30 is "on track." Tribune, which owns The Morning Call, the Chicago Tribune, Los Angeles Times and The Sun among its newspapers, is repurchasing up to 75 million shares of its stock in a bid to boost its sagging stock price.

"We look forward to reporting the results of the tender offer early next week," he said.

In his first comments to the public since announcing the buyback, FitzSimons also said Tribune continues to reject a breakup or sale of the company, as proposed by the Chandler family, Tribune's second-largest shareholder. The Chandlers control three seats on Tribune's 11-member board.

The Chandlers have blasted the stock buyback as "fundamentally flawed" and have called for more significant action - possibly including a spinoff of Tribune's broadcasting operations and a sale of its remaining assets. Tribune's holdings include 11 newspapers, 26 TV stations, cable superstation WGN and the Chicago Cubs baseball team.

But FitzSimons said the Chandlers' proposed changes would create a tax liability for Tribune. "The company has no intention of assuming any additional tax liability," FitzSimons said.

FitzSimons also said the Chandlers' requested restructuring of two investment trusts would benefit the family at the expense of other stockholders. The Chandlers and Tribune co-own the investment trusts, which are worth $3.5 billion and hold 51 million shares of preferred and common stock.

William Dean Singleton, CEO of the privately held newspaper publisher MediaNews Group, based in Denver, told reporters after FitzSimons' speech that he expects Tribune to prevail in its current challenge.

Kurt Blumenau writes for The Morning Call of Allentown, Pa.

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