Zell invests initial $250 million after sale gains antitrust OK

Billionaire Sam Zell made his initial $250 million investment in Chicago-based Tribune Co. Tuesday, paying $50 million for 1.5 million shares of the company and taking a note from Tribune worth $200 million, convertible to almost 6 million more shares. In return for the investment, Zell will take a seat on Tribune’s board by May 9, the date of the company’s annual meeting.

Zell’s investment came after the proposed deal received Hart-Scott-Rodino antitrust clearance from the Federal Trade Commission. It is an early step in a complex deal announced this month that will take Tribune private for $8.2 billion and transfer ownership of the Chicago-based media conglomerate to Zell and an employee stock ownership plan. Zell will end up with an option to buy 40 percent of Tribune for $590 million. The ESOP will own the other 60 percent.

Separately, Tribune’s Baltimore Sun newspaper announced Tuesday that after a 6 percent drop in first-quarter revenue, it would seek to eliminate 50 jobs, mostly through voluntary buyouts.

The news follows a dismal first quarter throughout the company, and announcements by Tribune’s Chicago Tribune and Los Angeles Times that they would trim up to 250 jobs via buyouts and layoffs.

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