Tribune Co., the Chicago-based media conglomerate, said on Thursday that it would go ahead with a major, $2 billion share repurchase program that had been discussed for weeks.
This tender offer allows the company to return value to shareholders who may be seeking some liquidity, and supports our long-term strategy to grow revenue at our newspapers and television stations, expand our interactive businesses and divest non-core assets, the company said in a statement.
In a regulatory filing disclosed this week, the company revealed that it would sell off over $500 million in non-core assets. It was also revealed that three of the eleven members of its board opposed the buyback, however, no reason was offered to their dissension.
They could be covering their legal position Edward Antorino, an analyst with Benchmark Company stated. They donâ€™t want to be a rubber stamp for the company.
The three dissenters are appointees of the Chandler family trust: Jeffrey Chandler, a great-grandson of Gen. Harrison Gray Otis, the founder of Times Mirror Co.; Roger Goodan, a retired oil services company executive; and William Stinehart Jr., a retired lawyer.
The Chandlers acquired their shares of Tribune, following its acquisition of Times Mirror Co. in 2000.
The Tribune operates a number of media businesses in broadcasting and publishing, including the Los Angeles Times, Chicago Tribune, and Superstation WGN.
Performance over the last few years has slipped, Atorino explained, however things are beginning to stabilize.
With cost cutting implemented over the past several quarters, as well continued growth in broadcasting, Tribune stands to see a turn around in 07 if they continue to hold costs flat. The $2 billion stock buy-back further adds to the value of the company.
Shares are at a 5 to 6 year low, Antorino said. By taking shares off the open market and putting them back into the hands of management, Tribune effectilvey sought to reduce supply, and get prices up.
It seems to be working for them, he added.
By end of day trading, shares of the Tribune rose 4.19 percent, or $1.27, to hit $31.53 on a trading volume of over 5 million.