It?s a wrap.
Facing declining revenues in an industry challenged by Internet rivals for readership and advertising, stockholders for Chicago-based media conglomerate Tribune Co. ? owner, among other holdings, of The Sun ? overwhelming voted Tuesday to take the public company private.
“The preliminary vote indicates that 97 percent of the votes represented by proxy voted in favor of the merger proposal, 2 percent voted against and 1 percent abstained,” Tribune Co. President and Chairman Dennis FitzSimons reported at a shareholder meeting. “The vote in favor represents approximately 65 percent of the total number of shares of Tribune common stock outstanding on the record date.
“Based on these results, I?m pleased to announced that the merger agreement and the merger have been approved by Tribune shareholders.”
FitzSimons, who will remain a director in the new employee stock-owned private entity, parried pre-vote shareholder skepticism about the $8.2 billion, $34-a-share public-to-private deal that will impose a $13 billion debt load on the new company.
Engineered by Chicago real estate magnate Sam Zell, the leveraged buyout would find Zell as board chairman of Tribune with a warrant to purchase up to 40 percent of company stock at an initial exercise price of $500 million. In addition, Zell will control another seat on a board that will have, in addition to FitzSimons, five independent directors and one representative of the employee stock ownership plan (ESOP).
“Though you claim that we have a representative, we have no input who that representative is,” one stockholder told FitzSimons. “I think it?s just ironic that if you own a company, you are denied a right [to govern it]. … I find that a little awkward.”
“The ESOP trustee was appointed by our current board of directors,” FitzSimons responded. “So there is an independence. … There will still be five independent directors ? and all those directors must be approved by the ESOP trustee.”
The questioner then said, “So I?m assuming then come January 1 when this … changes, we would, as employees, have the right to change the ESOP representative.”
“No,” FitzSimons replied.
The deal awaits FCC licensing approval, including a decision on a knotty, publishing-broadcasting cross-ownership issue in several markets.
