CHICAGO — Tribune Co. announced its intent to pursue the separation of its broadcasting and publishing businesses into two distinct companies. Tribune said this proposed separation is intended to maximize shareholder value through the spin-off of Tribune’s publishing assets to an independent company and the tax-free distribution of shares in that company to Tribune stockholders. The company announced last week that it entered into an agreement to acquire Local TV Holdings and the 19 television stations it owns in 16 markets across the country.
The two companies that would exist following the separation would be:
- Tribune Publishing Co., comprising Tribune’s publishing assets, including the Los Angeles Times, Chicago Tribune, The Baltimore Sun, Sun Sentinel (South Florida), Orlando Sentinel, Hartford Courant, The Morning Call and Daily Press.
- Tribune Co., comprising the other principal businesses, including 42 local television stations in 33 markets (following the close of Tribune’s acquisition of Local TV), WGN Radio, superstation WGN America, Tribune Studios, Tribune Digital Ventures, Tribune Media Services, its equity interests in Classified Ventures, CareerBuilder, and The TV Food Network, and its valuable portfolio of real estate assets.
Over the last several months, Tribune’s board of directors and management team evaluated a variety of strategic options intended to maximize shareholder value and position the company for long-term growth. As a result of this process, the board has authorized management to pursue the separation of the company’s primary lines of business, broadcasting and publishing.
During the next nine to a year, Tribune’s management team plans to develop detailed separation plans for the company’s board of directors to consider. Upon the closing of the proposed transaction, each entity—Tribune Publishing Co. and Tribune Co.—will have its own board of directors and senior management team.
The completion of Tribune’s separation into two companies is subject to a number of conditions, including the receipt of regulatory approvals, opinions from tax counsel, further due diligence and the effectiveness of appropriate filings with the U.S. Securities and Exchange Commission. While Tribune intends to pursue the separation of its broadcasting and publishing businesses, there can be no guarantee that the transaction will be concluded or assurances as to transaction terms.