A New Stock Purchase Stirs Speculation About Breakup Of Tribune Co.
The latest such speculation stems from a Wall Street Journal article this week reporting that Nelson Peltz, the billionaire investor, who has a taste for controlling companies in which he invests, has bought a 1.2% share of Tribune stock, and has been in touch with dissident Chandler family representatives on the Tribune board.
The Journal said Peltz had directly discussed with the Chandlers the value in the company that could be derived from a breakup.
The WSJ also reported that talks between the Chandler representatives and the Tribune Co. executives looking toward a resolution of their dispute, which is partly over problems with Chandler Trusts growing out of the sale of Times-Mirror to Tribune in 2000 and partly over whether a stock buyback is good company policy, have so far gone nowhere.
The Journal said that one reason for the lack of progress was the absence, expected until the end of this month, of Tribune CEO Dennis FitzSimons, who is recovering from prostate surgery.
Since FitzSimons foisted his stock buyback plan on the objecting Chandlers, the Tribune stock price first rose slightly but then fell below the $30 level at which some stock analysts believe a company breakup or a hostile takeover becomes more likely.
The Peltz purchase sent the stock price back over the $30 level, however.
In FitzSimons' health absence, Tribune cost cutting has continued, with new diminutions in the quality of the L.A. Times and other former Times-Mirror papers.
We are now approaching the month of September, during which a Chandler family consultant, Tom Unterman, once said something might develop with relation to a Tribune Co. sale of the Times. Since making this remark, however, Unterman and the Chandlers have clammed up.
Under Tribune Co. management, Times circulation has dropped by 250,000 and revenue has been flat. Meanwhile, at least four Los Angeles area entrepreneurs, Eli Broad, David Geffen, Ron Burkle and Peter Ueberroth have issued statements saying they would like to buy the newspaper.
It can't happen too soon, in my view.