Zell wins auction for Tribune Co.

CHICAGO - Tribune Co. has accepted a buyout offer from real estate investor Sam Zell in a deal valued at about $8.2 billion and plans to sell the Chicago Cubs at the end of this season, the media company said Monday.

The owner of the Chicago Tribune, Los Angeles Times, and various other newspapers and TV stations spent six months soliciting bids and reviewing offers.

Tribune had set a self-imposed March 31 deadline to announce a spin-off, buyout or reorganization.

In addition to the Zell bid, the Tribune considered a competing offer from Los Angeles billionaires Eli Broad and Ron Burkle.

The company has been under pressure from key shareholders to boost its stock price and, along with others in the newspaper industry, has been losing readers and advertisers to the Internet. Tribune is the nation's second biggest newspaper publisher after Gannett Co.

Tribune said Zell plans to invest $315 million in the deal and will eventually become chairman of the Chicago-based company's board when the buyout is complete sometime in the fourth quarter.

The buyout will be conducted as a two-part deal, the company said. The first stage, expected to be completed in the second quarter, will involve a cash tender offer of $34 per share for 126 million shares, more than half of the outstanding Tribune shares. The remaining shares will be purchased later at the same $34 per share price.

Broad and Burkle also had offered $34-per-share, and the company's board reportedly spent much of the weekend sifting through the two offers.

Zell, 65, made his fortune reviving moribund real estate. After a bidding war culminated in February, he sold his company, Equity Office, to the private equity firm Blackstone Group for $23 billion.

If Tribune decides to accept another buyout offer before its shareholders approve the deal, the company will have to pay Zell a $25 million breakup fee.

Experts said that low figure would easily allow Broad and Burkle to submit another counter bid, but that prospect seemed unlikely.

Tribune shares climbed 85 cents, or 2.7 percent, to $32.96 in midday trading Monday on the New York Stock Exchange.

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