Sales rush on Tribune stock

Chicago Tribune ^ | May 25, 2007 | James P. Miller

[Zakeet]

Tribune Co. said Friday that its $34-a-share tender offer for up to 126 million of its shares was heavily oversubscribed, and as a result the Chicago media holding company will buy a prorated portion of the shares tendered.

Tribune said investors had tendered 224 million shares, representing 92 percent of the company's outstanding shares.

The company didn't say what the pro rata percentage will be, noting that the count of tendered shares is preliminary.

[Snip]

The oversubscription was hardly a surprise, given the fact that investors were essentially being offered the option of receiving $34 for their shares now or $34 for their shares several months from now.

In New York Stock Exchange trading Friday, Tribune shares slipped $1.06, or 3.2 percent, to close at $32.14.

The lower price reflects the fact that with the first portion of the buyout now complete, buyers of Tribune shares know the stock never will attain a value of more than $34, and it won't fetch that price until Tribune executes the second portion of its buyback at the end of 2007.

Separately, Tribune disclosed late Friday that its agreement to sell two Connecticut newspapers to Gannett Co. for $73 million has been called off after an arbitrator ruled Gannett was obliged to honor a union contract at one of the papers.

[Zakeet]

The old dog's stock has peaked, is tanking, and they can't sell two of their newspapers thanks to a union contract with the United Autoworkers (of all organizations) representing their employees.

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