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But Tribune easily secured the backing of shareholders for the deal to take the company private under an employee stock ownership plan
-- a foregone conclusion since the $34-a-share transaction will pay them significantly more than the current value of the languishing stock.
Preliminary results indicated 97 percent of those casting votes, representing a majority of shares, had approved the April 1 deal led by billionaire Sam Zell.
Zell skipped the anticlimactic 40-minute meeting, which was attended by only a few dozen shareholders. Chief Executive Dennis FitzSimons, who will cede the chairman's role to Zell when the deal is complete, said the real estate mogul had a prior commitment.
Zell later issued a statement through the company reiterating his commitment to the deal: "I believe Tribune Co. is reasserting itself as a national leader in news generation and distribution. Despite the recent upheaval in the credit markets, my view of the company as an investment has not changed."
The Chicago-born tycoon Zell has agreed to invest $315 million in the company, including a $200 million loan and a $50 million cash infusion which he has already made. Once the deal is completed, he will own warrants to buy about 40 percent of the company, with the ESOP and Tribune management controlling the remainder.
FitzSimons told shareholders the company still anticipates receiving approval from the Federal Communications Commission in the fourth quarter, with the deal closing soon afterward. He said Tribune expects its operations to remain in compliance with its creditors, as required in order to hold lenders to their commitment for an additional $4.2 billion in financing.
He also assured employees that their retirement benefits are "safe and secure," calling some union claims to the contrary "a blatant misrepresentation of facts."
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 Several representatives of the International Brotherhood of Teamsters, which represents about 2,000 Tribune employees, objected to the lack of clout that Tribune workers will have under the employee stock ownership plan and raised other questions about the deal.
They were unimpressed by FitzSimons' statement that employees will be represented by a trustee, the GreatBanc Trust Co., which will vote on board directors.
"We're going to continue to push for employee representation on the board and the ESOP," Teamsters representative Louis Malizia said afterward. "These are future owners of the company now, and they deserve a fair shake."
Tribune, which owns 11 daily newspapers -- including the Chicago Tribune, the Los Angeles Times, Newsday and The (Baltimore) Sun
-- 23 TV stations and the Chicago Cubs, needs the FCC to grant it waivers from rules banning same-market ownership of television and newspapers. After that, it will have to navigate the turbulent newspaper industry while under a $13 billion debt burden.
FitzSimons said in response to a shareholder's question that while Tribune intends to sell the Cubs and is reappraising its real estate portfolio, it has no plans "at this point" to sell any newspapers beyond the two small dailies in Stamford and Greenwich, Conn., that it has been trying to divest for months.
Tribune shares rose 96 cents, or 3.6 percent, to $27.98 Tuesday. That's well above last Thursday's nine-year low of $22.78 but still 18 percent below the $34 transaction price.
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On the Net:
Tribune Co.: http://www.tribune.com/
[Associated Press; by Dave
Carpenter]
Copyright 2007 The Associated Press. All rights reserved. This
material may not be published, broadcast, rewritten or
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