Teamster to protest at Tribune special meeting

The International Brotherhood of Teamsters union said Monday it intends to bring a delegation of “union leaders and newspaper workers” to Tribune Co.’s special shareholder meeting Tuesday.

Chicago-based Tribune agreed earlier this year to a complex, two-part deal in which the media holding company is to be taken private for $34 a share, or $8.2 billion.

Under that plan, a group led by billionaire real estate investor Sam Zell, in combination with a newly formed employee stock ownership plan, will take ownership of Tribune Co. The ESOP arrangement offers significant tax benefits.

The Teamsters Union, which represents about 2,000 Tribune Co. employees, has publicly questioned the deal. The union contends the structure of the buyout means workers will assume the financial and operating risk, while Zell gains control of the company through a relatively modest cash contribution.

“Although called an Employee Stock Ownership Plan,” Teamsters head Jim Hoffa testified at a Federal Communications Commission hearing in late June, “employees will have few real ownership rights.”

The first element of the buyout plan, in which shareholders tendered about half their shares in exchange for $34 in cash, closed in May.

And while Tribune shares are currently trading at a deep discount to the proposed $34 price — reflecting shareholder reservations as to whether the second part of the deal will be consummated, at least at the agreed-upon price — Tribune officials have continued to contend they expect the second and final portion of the ESOP/Zell buyout to be completed late this year.

Tribune holders are scheduled to vote Tuesday to formally authorization completion of the planned deal. The Teamsters said their delegation intends on Tuesday to “warn investors, employees and creditors about the dangers” Tribune’s transaction represents.

– By James P. Miller

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