News reports say Tribune Co shareholders today formally voted to approve an $8.2 billion plan to take the company private. The company said 97% of the shares cast OKed the $34-a-share buyout led by a group that includes Chicago real estate tycoon Sam Zell. Half the company’s shares were already bought back at the $34 price. Wall Street is liking this deal less and less, and Tribune stock fell below $26 in last week’s downturn. As to questions whether the funding will remain in place, chief executive Dennis FitzSimons told shareholders the buyout accord has a “tightly written” clause governing any pullout by the financing group that’s based on adverse developments in the newspaper industry as a whole, rather than just at Tribune. Because of that, FitzSimons said, “we don’t anticipate, nor do our financing sources anticipate, an invocation of that clause.” FitzSimons reiterated that Tribune expects the deal to close in the fourth quarter, pending approval by federal regulators, and he added that Tribune’s isn’t planning to shed any newspaper assets as part of the buyout. Today’s stock price is right near $28. Meanwhile, I still say that Tribune’s 20,000 employees including those at the Los Angeles Times will get screwed by the Zell/ESOP plan which depends upon cash flow results to pay down the massive debt.
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