It’s unofficial, but the Chandler family no longer has any investment ties to the Los Angeles Times or its Big Media parent company Tribune Co, I’m told. That’s because financial sources say that the Chandler Trusts sold all their stake in Tribune Co after the close of market today, with Goldman Sachs handling the block trade. On May 24th, the family tendered all of its 48.1 million outstanding Tribune shares, or 20% stake in the Chicago-based company. But, after that, the Trusts still controlled 17% of Tribune’s outstanding stock. Today, a tally of 20,351,954 shares, described as being sold “by shareholders, including the Chandler Trusts”, were offered by Goldman at $31.50, priced below the $32.24 closing price to entice investors. I’m told that “Goldman did not have a problem finding buyers”. So there it is: the end of an era. UPDATE: *Three board members representing the Chandler Trusts resigned upon completion of the share tender offer, as agreed under the buyout deal with real estate magnate Sam Zell. The board now has nine members including Zell, who was elected on May 9 and will become chairman after Tribune is taken private. The Chandler Trust reps – Jeffrey Chandler, Roger Goodan and William Stinehart Jr., — went onto the board in 2000, when Tribune acquired Times Mirror for $6.5 billion.*
In the years following, Tribune’s stock began to fall, dropping about 50 percent from an all-time high above $60 in 1999. Especially upset was the Chandler Family Trusts, whose avarice knew no bounds. Suddenly there was bitching and moaning and agitating for Tribune to put itself up for sale. The buyer was Zell in a two-stage $8.2 billion deal financed almost entirely by debt. (See my Be Afraid. Be Very Afraid.) The Chandler Trusts wound up with a hefty payout, and a hefty tax liability, from the sale in exchange for their $1.6 billion valued stake in Tribune Co. Today’s move shouldn’t come as a surprise, even though the Trusts didn’t wait for the second-stage of the Zell deal to close in November when they would have received $3 more per share ($34.50). A lot of Tribune Co investors have bailed early.