Despite raucous boardroom dissent, Tribune Co. said Tuesday that it had completed its tender offer and expected to purchase 45 million of its shares at $32.50 apiece, the top price set by the company.
The response from investors fell short of the maximum 53 million shares Tribune said it would buy under the offer. The repurchase was carried out amid intense opposition from California's Chandler family, which had a 12% stake and is expected to emerge as Tribune's largest shareholder after the tender offer and subsequent buybacks .
Completing the tender offer will only increase tensions between the media company and the Chandlers, who in 2000 sold control of the Los Angeles Times and its parent, Times Mirror Co., to Tribune. The family vowed Tuesday to continue pressuring Tribune management to make strategic changes, and are expected to try to enlist major investors and equity funds as allies.
"We, like many other non-tendering stockholders, believe there is greater value to be realized through prompt and meaningful strategic action," the Chandlers said in a statement. "As the largest stockholder in Tribune ... we will continue our efforts to bring about positive change for the benefit of all Tribune stockholders,"
Chicago-based Tribune said it would next acquire, as planned, 10 million shares from its largest stockholder, the McCormick Tribune Foundation, which is controlled by Tribune management. That purchase, set for July 12, also would be priced at $32.50 a share. It would make the Chandler family the company's largest shareholder, with a stake of more than 14%.
The company said it would then acquire as many as 20 million additional Tribune shares on the open market, starting as soon as July 12.
That would bring the total buyback to 75 million shares, or 25% of Tribune's 300 million shares outstanding.
It also would raise the Chandlers' stake to about 16%, assuming they do not sell any of their stock.
The Chandlers, who control three Tribune board seats, had opposed the $2-billion debt-financed share buyback, arguing that the company instead should spin off its broadcast division or put itself up for sale.
With the tender offer over, Tribune appeared to shrug off the Chandler challenge.
"Now, our priority is to improve operating performance through a combination of top-line growth initiatives and additional cost savings," Tribune Chief Executive Dennis J. FitzSimons said in a statement Tuesday. "We'll also continue to move forward on dispositions of non-core assets."
