Tribune Company (NYSE:TRB) shares moved up 2.65% today after the it agreed to Sam Zell's $8 billion buyout offer, making the end of a six month auction process. Under the terms of the deal, Zell will investment $315 million in equity, which will be largely held through an employee stock ownership plan or ESOP. Meanwhile, Zell will retain a subordinated note and a warrant enabling him to acquire 40% of Tribune's common stock. The company also agreed to sell the Chicago Cubs and 25% of its Comcast SportsNet Chicago interests to pay down debt after the 2007 baseball season. Tribune's chairman, president and CEO Dennis FitzSimons said, "As a private company, Tribune will have greater flexibility to transform our publishing/interactive and broadcasting businesses with an eye toward long-term growth."

How is this entire deal going down? Well, first there will be a cash tender offer for around 126 million shares at $34 per share, funded through loans and a $250 million investment from Zell. This initial tender offer is expected to be completed by June. Then the company will implement a merger agreement in which Tribune and the ESOP will merge and all remaining Tribune stock will be converted to cash at $34 per share. The entire process is expected to close in the fourth quarter of this year, marking an end to the lengthy and heated Tribune auction process.

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