Posted on 05/30/2006 4:38:09 AM PDT by abb
EW YORK (MarketWatch) -- Tribune Company (TRB) said it will buy back up to 75 million shares of its common stock, which would represent 25% of the total shares outstanding and have a total market value estimated at more than $2 billion. Of the total, the Chicago publishing and broadcasting company said 53 million shares would be repurchased by way of a Dutch Auction at a price between $28 and $32.50. In addition, 10 million shares will be bought back from a principal shareholder and 12 million will be repurchased in the open market. The company said it believes the repurchase program would add to earnings and lower its cost of capital. The stock closed Friday down 1 cent at $27.89
Ping
Boo hoo.
I gather from this that based on stock value the company is worth about $6 billion. Frankly, I have never much cared for buy-backs; they do not always increase shareholder value, and are often used in preference to increasing (or paying) dividends.
Why buy them up now? Couldn't they save lots of money by waiting six months or a year for the price to go down more?
in addition, 10 million shares will be bought back from a principal shareholder...
Wonder who this mysterious "principal shareholder" is? The Chandler family? Are they getting out while they still can? What say y'all?
More information here:
http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/05-30-2006/0004370366&EDATE=
Tribune to Repurchase up to 75 Million Common Shares
Represents 25% of Shares Outstanding;
Value of More Than $2 Billion;
Modified 'Dutch Auction' Tender Offer Commences Today;
Company Targets $500 Million in Asset Sales, $200 Million in Cost Savings;
Will Continue to Invest and Innovate for Top-Line Growth
CHICAGO, May 30 /PRNewswire-FirstCall/ -- Tribune Company (NYSE: TRB)
today announced that its Board of Directors has authorized the repurchase
of up to 53 million shares of its common stock in a modified "Dutch
Auction" tender offer, an additional 10 million shares from its principal
shareholder following completion of the tender offer and up to an
additional 12 million shares through open market repurchases after the
tender. In the tender offer, shareholders will have the opportunity to
tender some or all of their shares at a price that is not greater than
$32.50 and not less than $28.00. The tender offer will commence today and
is expected to expire on June 26, 2006, unless extended.
The repurchase of up to 75 million shares of common stock through these
transactions represents about 25 percent of the common shares outstanding
with a total value of more than $2 billion.
The stock repurchases will be funded through a combination of bank debt
and publicly issued bonds. This incremental debt will be repaid from the
significant free cash flow generated by Tribune's media businesses and
proceeds from at least $500 million in asset sales, which could include
certain non-core broadcasting and publishing assets as well as real estate
and securities held for investment. The company expects that its current
credit ratings will be lowered as a result of the increased debt. The
company will maintain its current dividend and continue to fund additional
investments.
"These stock repurchases demonstrate our confidence in the company and
its future and represent a very meaningful step in our commitment to
enhance value for shareholders," said Dennis FitzSimons, Tribune chairman,
president and chief executive officer. "They also reflect our strong belief
that Tribune's current share price does not adequately reflect the
fundamental value and long-term earnings prospects of the company's
businesses."
"The repurchase transactions are expected to be accretive to earnings
per share and will lower Tribune's cost of capital," added FitzSimons.
"They also allow us to optimize our capital structure while maintaining
financial flexibility. We intend to achieve our goal of generating
additional shareholder value through improved operating performance, asset
dispositions and the disciplined repayment of debt over the next several
years."
Strategic Initiatives
Tribune management reiterated its growth plans for the company's major
market media businesses.
The publishing and interactive strategy calls for a combination of
revenue growth -- primarily driven by interactive -- and structural cost
savings over the next two years. Specific growth strategies include:
* Expand existing interactive businesses and invest in building national
interactive networks.
* Sustain the broad reach and revenue of Tribune's market-leading
metropolitan newspapers through editorial, sales and marketing
innovation.
* Grow targeted print and direct mail businesses.
* Aggressively manage costs to best serve customer needs and take full
advantage of scale.
The broadcasting strategy calls for utilizing the scale of our
television group to maximize audience share and cash flow through the
following initiatives:
* Acquire quality off-network programming to generate large audiences for
advertisers in our local markets.
* Complement our stations' strong broadcast network affiliations (The CW,
FOX, MyNetworkTV and ABC) with a focus on local news and sports.
* Align with major program suppliers to co-develop quality first-run
programming for key audience dayparts.
* Create additional value via cable/satellite television
(Superstation WGN) and through the use of our digital spectrum.
* Continue to use technology to increase efficiency and reduce costs.
Across the company, $200 million in additional cost savings from
existing operations are planned over the next two years to offset expense
inflation. Investments in common systems for advertising, circulation,
content and interactive capabilities will improve efficiency, as will
greater collaboration across business units, outsourcing and local
initiatives. Overall, resources will be redeployed to support key growth
opportunities, particularly in interactive businesses.
"Tribune Company remains committed to delivering long-term shareholder
value by improving the operating performance of our major market media
businesses," said FitzSimons. "We have an outstanding group of major market
media assets capable of producing top-line growth by providing excellent
service to our customers and communities."
Tender Offer and Other Share Repurchases
In the tender offer, shareholders will have the opportunity to tender
some or all of their shares at a price that is not greater than $32.50 and
not less than $28.00. Based on the number of shares tendered and the prices
specified by the tendering shareholders, Tribune will determine the lowest
per share price within the range that will enable it to buy 53 million
shares, or such lesser number of shares as are properly tendered. If fewer
shares are properly tendered, the company will purchase all shares that are
properly tendered and not properly withdrawn. If more than 53 million
shares are tendered, the company will purchase all shares tendered at or
below the purchase price selected in the tender offer on a pro rata basis,
except for "odd lots" (lots held by owners of less than 100 shares), which
will not be prorated. All shares acquired in the tender offer will be
acquired at the same price, including shares that were tendered at a lower
price. Shareholders whose shares are purchased in the offer will be paid
the purchase price in cash, without interest, promptly after the expiration
of the offer period.
McCormick Tribune Foundation and Cantigny Foundation, affiliated
nonprofit organizations which together hold 13.6% of Tribune's outstanding
shares, have agreed to sell to the company a total of 10 million shares,
subject to adjustment depending on the number of shares tendered, and
contingent on the company purchasing at least 30 million shares in the
tender offer. Purchases from these foundations will be made on the 11th
business day following the expiration of the offer period at a price equal
to the per share price the company pays for shares purchased in the tender
offer.
Following the completion of the tender offer, the company may also
purchase up to an additional 12 million shares through open market
purchases. These open market purchases may not begin until the 11th
business day following the expiration of the offer period.
The tender offer is not contingent upon any minimum number of shares
being tendered. The tender offer is subject, however, to certain conditions
as specified in the Offer to Purchase, including obtaining the necessary
financing for the tender offer from credit facilities arranged by Merrill
Lynch Capital Corporation and Citigroup Global Markets Inc., the lead
financial advisors on the transaction. The credit facilities will be used
to fund the tender offer, the principal shareholder stock purchases and the
post-tender offer open market stock purchases, to refinance outstanding
commercial paper and other near-term debt maturities and to replace
Tribune's existing revolving bank credit agreements.
Merrill Lynch & Co. and Citigroup will serve as Co-Dealer Managers for
the tender offer. Georgeson Shareholder Communications Inc. will serve as
Information Agent and Computershare Trust Company, N.A. will serve as the
Depositary. The Offer to Purchase, Letter of Transmittal and related
documents will be mailed to shareholders of record and will also be made
available for distribution to beneficial owners of Tribune common stock.
DETAILS OF CONFERENCE CALL
Today at 8 a.m. CT, management will host a conference call to discuss
this announcement. To access the call, dial 800/510-9691 (domestic) or
617/614-3453 (international) at least 10 minutes prior to the scheduled 8
a.m. start. The participant access code is 45686894. Replays of the
conference call will be available May 30 through June 30. To hear the
replay, dial 888/286-8010 (domestic) or 617/801-6888 (international) and
use access code 10182055. A live webcast will be accessible through
http://www.tribune.com and http://www.earnings.com. An archive of the webcast will be
available May 30 through June 30.
More information about Tribune is available at http://www.tribune.com or by
calling 800/757-1694.
TRIBUNE (NYSE: TRB) is one of the country's top media companies,
operating businesses in publishing and broadcasting. It reaches more than
80 percent of U.S. households and is the only media organization with
newspapers, television stations and websites in the nation's top three
markets. In publishing, Tribune operates 11 leading daily newspapers
including the Los Angeles Times, Chicago Tribune and Newsday, plus a wide
range of targeted publications. The company's broadcasting group operates
26 television stations, Superstation WGN on national cable, Chicago's
WGN-AM and the Chicago Cubs baseball team. Popular news and information
websites complement Tribune's print and broadcast properties and extend the
company's nationwide audience.
This press release contains certain comments or forward-looking
statements that are based largely on the Company's current expectations and
are subject to certain risks, trends and uncertainties. Such comments and
statements should be understood in the context of Tribune's publicly
available reports filed with the Securities and Exchange Commission,
including the most current annual 10-K report and quarterly 10-Q report,
which contain a discussion of various factors that may affect the Company's
business or financial results. These factors, including the ability to
complete the tender offer and the ability to achieve cost savings, could
cause actual future performance to differ materially from current
expectations. Tribune is not responsible for updating the information
contained in this press release beyond the published date, or for changes
made to this document by wire services or Internet service providers. The
Company's next 10-Q report to be filed with the Commission may contain
updates to the information included in this release.
This press release is for informational purpose only and is not an
offer to buy or the solicitation of an offer to sell any shares of the
Company's common stock. The solicitation of offers to buy Tribune Company's
common stock will only be made pursuant to the Offer to Purchase and
related materials that the Company is sending to its shareholders.
Shareholders should read those materials carefully because they will
contain important information, including the various terms and conditions
of the offer. Shareholders will be able to obtain copies of the Offer to
Purchase, related materials filed by the Company as part of the statement
on Schedule TO and other documents filed with the Securities and Exchange
Commission through the Commission's internet address at http://www.sec.gov
without charge. Shareholders will also be able to obtain copies of the
Offer to Purchase and related materials, as filed with the Commission
(excluding exhibits), without charge from the Company or by written or oral
request directed to the Information Agent, Georgeson Shareholder
Communications Inc., 17 State Street, 10th Floor, New York, New York 10004,
telephone number 1 (866) 767-8963 (banker and brokerage firms call collect
(212) 440-9800).
SOURCE Tribune Company
I hope that isn't anything like a Dutch Oven.
I was ready to post this update story and saw you had posted it.
The stock is up close to 8% on this Enronning manuever.
Wonder how many mutual fund companies are planning on selling/dumping and running away?
"Why buy them up now? Couldn't they save lots of money by waiting six months or a year for the price to go down more?"
That was the first thought that ran through my old brain which is about 2 cups of coffee below the normal level.
Or one of these wise investors?:
Barclays Global Investors Intl 14,945,317 Shares
T Rowe Price Associates 14,281,571 Shares
Lord Abbett & Co 13,463,493 Shares
Ariel Capital Mgmt 10,270,258 Shares
You better believe it. Companies typically buyback stock simply to enable insiders to convert worthless paper to hard assets at the expense of investors trading cash savings for pretty paper. An SEC that truly served the public would prevent such fraud instead of turning a blind eye while mumbling something about "caveat emptor."
Taking a quick peek at TRB's latest 10-Q we see:
| Shareholder's equity | 6.662 |
| Goodwill | (5.947) |
| Other Intangibles | (3.082) |
| ------------ | |
| Net Equity | (2.367) |
Giving TRB the benefit of the doubt that they can actually sell their broadcast rights, Time Warner stock, and other assets of dubious value at Friday's NYSE closing price small investors can trade $1.00 of their cash savings for about 29 cents of TRB debt.
Pinging with fresh information...
Tribune: SEC closes inquiry into circulation misstatements
By Gabriel Madway
Last Update: 12:28 PM ET May 30, 2006
SAN FRANCISCO (MarketWatch) -- Tribune Co. (TRB) said Tuesday the Securities and Exchange Commission has completed its inquiry into circulation misstatements at the company's Newsday and Hoy newspapers. In closing its inquiry, the SEC ordered Tribune to "cease and desist" from violating statutory provisions related to its record-keeping and reporting. No fines or other sanctions were levied against the Chicago-based media company. Tribune identified the circulation reporting errors at the two New York newspapers as part of an internal investigation in 2004. The SEC's inquiry also began in 2004
Fitch downgrades Tribune ratings; outlook 'negative'
By Katherine Hunt
Last Update: 11:19 AM ET May 30, 2006
SAN FRANCISCO (MarketWatch) -- Fitch Ratings on Tuesday lowered certain ratings on Tribune Co. (TRB) , including its issuer default rating, to BBB- from A-. The outlook on the Chicago-based media company is negative. Fitch said the downgrades reflect the significant debt load that Tribune is assuming in order to return capital to shareholders. Tribune plans to incur more than $2 billion in additional bank debt and publicly issued bonds to fund its tender of 25% of its outstanding shares. The leveraged share buyback represents a significant departure from Tribune's historically conservative financial policies and emphasizes the pressures that slower growing traditional media companies are under to boost their stock prices, the agency said.
Tribune to buy back shares, pursue asset sales
By David B. Wilkerson, MarketWatch
Last Update: 10:42 AM ET May 30, 2006
CHICAGO (MarketWatch) - Tribune Co. shares rose more than 7% Tuesday after the company said it would buy back up to 75 million shares of its common stock and that it expects to sell at least $500 million in certain non-core broadcasting and publishing assets outside of its top three markets.
Shares of Chicago-based Tribune (TRB) , publisher of the Chicago Tribune and the Los Angeles Times and owner of Superstation WGN, were up $2.10 at $29.98 on heavy volume of 1.67 million shares in morning trading.
Tribune said up to 53 million shares could be repurchased on a Dutch auction tender offer, under which shareholders can tender some or all of their shares at a price in the range of $28 and $32.50 per share. The tender begins Tuesday and is expected to expire June 26.
After the tender offer is completed, the company's principal shareholders, McCormick Tribune Foundation and Cantigny Foundation, have agreed to sell 10 million shares to Tribune. That sale is subject to adjustment depending on how many shares are tendered, and is contingent on Tribune buying back at least 30 million shares in the tender.
McCormick Tribune and Cantigny, nonprofit charitable organizations, own a combined 13.6% of Tribune's outstanding shares.
Tribune Chief Executive Dennis FitzSimons told analysts during a conference call Tuesday that they should not read anything into McCormick Tribune's decision to sell some shares at a time when the stock is near its lowest levels this decade.
McCormick Tribune has grants that have to be paid annually, among other expenses, and needs to maintain "a certain amount of liquidity," FitzSimons said.
Tribune Co. also said it plans to pursue the divestment of $500 million in non-core broadcasting and publishing assets, as well as real estate and securities held for investment.
Don Grenesko, Tribune's senior vice president of finance and administration, said on the call that investors should expect the asset sales to be done within six to 12 months.
FitzSimons said the Chicgao Cubs baseball team is not for sale, and that the company is not considering the divestiture of any assets in its top three markets - Chicago, Los Angeles and New York, where it publishes Newsday and owns television station WPIX. End of Story
David B. Wilkerson is a reporter for MarketWatch in Chicago.
Additionally, Tribune announced a $200 million cost saving plan, which includes staff reductions and the implementation of common systems for advertising, circulation, and content.
I see layoffs. I see firings. I see nothing but good news...
2 billion more poured down the rat hole.
We know the "New Coke" was the worst business decision to date, but this could give it a run for the money.
The only industry that insults and lies to its customer base daily.
WOW! Gotta be a 'bottom'..let's all buy!.....LOL...
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