Tribune Company (NYSE:TRB) shares are up over 5% today talk of a possible LBO as the Board contemplates the company's future direction. The company has drawn a lot of criticism by shareholders close to the company after slowly trending from $50 in 2004 to just $30 per share now. Specifically, Tribune has been taking a lot of heat from its second largest shareholder - Chandler Family Trusts - especially after the company failed in its bid to buyback of 25% of its outstanding shares a couple months ago. After this, Chandler Family Trusts suggested that the company spin-off its TV division or putting the entire company up for sale.
It appears that the Board is now acting on this advice... The WSJ is reporting that the company is considering either a leveraged buyout (LBO) in an effort to take the company private or spinning off its TV group. Either situation would generate value for shareholders, as LBOs come at a premium to the market price while spinoffs generally outperform the market. While nothing is certain now, this is an interesting situation that is definitely
worth watching.
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