Tribune shareholders approve merger agreement as company heads toward privatization

By Lisa Kerner

Charlotte, N.C., Aug. 21 - Tribune Co. shareholders approved the company's merger agreement as part of a going-private transaction.

Some 97% of the shares voted were cast in favor of the merger at a special meeting held in Chicago on Tuesday. The number of shares voted in favor of the merger represented about 65% of the total shares outstanding and entitled to vote at the meeting.

"We're pleased that Tribune shareholders recognize the value of this transaction and have voted overwhelmingly to approve it," Tribune chairman, president and chief executive officer Dennis FitzSimons said in a company news release.

The fully financed transaction is expected to close in the fourth quarter.

On April 2, Tribune announced it had received $11.2 billion in debt financing commitments from Citigroup, Merrill Lynch and JPMorgan to help back its public-to-private transaction.

In the first stage of its plan to go private, Tribune will raise $7 billion of new debt, of which $4.2 billion will be used to complete a cash tender offer for about 126 million shares at $34 per share, and the remaining $2.8 billion will be used to refinance existing credit facilities.

In the second stage, Tribune will raise an additional $4.2 billion of debt, which will be used to buy all the remaining outstanding shares of the company. Tribune's existing publicly traded bonds are expected to remain outstanding.

The going-private transaction is being supported by Sam Zell with a $315 million investment. "I believe Tribune Co. is reasserting itself as a national leader in news generation and distribution," Zell said in the release after the stockholder meeting.

"Despite the recent upheaval in the credit markets, my view of the company as an investment has not changed."

Once the company is privately held, it will have an Employee Stock Ownership Plan holding all of Tribune's then-outstanding common stock, with Zell holding a subordinated note and a warrant entitling him to acquire 40% of the Chicago-based media company's common stock.

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