TribCo buying back stock, selling assets -- but not Cubs

Wasn't sure if this should be under journalism board because its a media company or under anything goes because of the implications if they do/don't sell the Cubs. FYI: I trimmed the article (from chicagosports.com) down a bit, but left the key points. Feel free to discuss any and all implications.

Tribune Co. to buy back $2 billion in stock

By James P. Miller
Tribune staff reporter

May 30, 2006, 4:00 PM CDT

--- Tribune Co., in a move that will boost its stock price but saddle the company with a punishing debt load, today disclosed a plan to buy back a quarter of its outstanding shares at a cost of at least $2 billion.

---- On its face, the move appears to be a bid to return cash and calm restless shareholders, and to provide a vehicle for those who want exit the stock. Tribune may also, however, be angling to render itself less attractive to any potential suitor: its whopping post-buyback debt of nearly $6 billion will make it hard for leveraged-buyout companies to borrow against Tribune's assets.

---- Under the plan Tribune unveiled today, the company will sell off an undisclosed grab-bag of "noncore" assets, which officials explicitly said won't include the Chicago Cubs baseball team, to raise an estimated "at least" $500 million.

---- The company, which has cut deeply into spending already, said it also thinks it can squeeze an additional $200 million in annual savings out of operations over the next 24 months.

----- Tribune's plan calls for the company to repurchase up to 75 million of its shares. Of that, up to 53 million will be purchased from stockholders through a complex format known as a Dutch Auction, at a price between $28 and $32.50.

------ Subject to certain conditions, Tribune will also buy ten million shares from the company's biggest stockholder, the McCormick Tribune Foundation and Cantigny Foundation.

---- In a final step, the company said it will buy back about 12 million additional shares in the open market following the Dutch Auction, which is set to expire June 26.

 

Anyone care to predict the date that the LA Times has their first six page sports section?

 

If only my boy Mark Cuban would make them an offer they couldn't refuse.

Of course, baseball owners would never let that happen.

 

I do think Tribune Company wants to keep itself from being bought.
Most companies buy back stock with extra cash on hand. Very few borrow to make it happen.

 

Stock closed at 32.51 today.