Tribune-Deal Worries Remain Despite Approval

Tribune Co. shareholders approved an $8.2 billion deal to take the media company private, but deep concerns remain about the debt-laden deal as credit markets continue to be jittery.

Tribune said a preliminary vote tally showed that investors voted overwhelmingly in favor of the deal, which is valued at $34 a share. Roughly 97% of the shares voted supported the complex buyout led by real-estate mogul Sam Zell.

The vote was scarcely in doubt. The question dogging the deal for months is whether the buyout, which is being financed by more than $8 billion in loans, can get done as investors shy away from credit risk.

Tribune had to make compromises to finance a first stage of the deal, and the company must take on $4.2 billion more debt to finish the buyout. Concerns have arisen about whether Tribune may be forced to drop or renegotiate the deal.

Reflecting the doubts about the deal, a yawning gap has opened between the market price of Tribune shares and the value of the deal. That spread has retreated somewhat in recent days but remains almost 20% off the deal price — one of the largest spreads among pending buyouts.

Tribune shares were up 96 cents, or 3.6%, to $27.98 apiece yesterday in 4 p.m. composite trading on the New York Stock Exchange.

Tribune has said that it believes the deal will close in the fourth quarter and that financing for the deal is fully committed. Debt financing is being provided by J.P. Morgan Chase & Co., Merrill Lynch & Co., Citigroup Inc. and Bank of America Corp.

Mr. Zell has been quiet on the health of the offer, but a person close to him said last week that his view on the deal hasn’t changed.

The vote may not have been in doubt, but Tribune officials took a verbal beating from unions and other employee representatives. Tribune workers will be majority owners of the Chicago company under an employee stock-ownership plan that is a key feature of the going-private deal.

Officials from the Teamsters, which represents some Tribune employees, said the union wants to have more say over the stock-ownership plan. Other employees asked whether Tribune would seek to shed assets as part of the deal.

The company plans to sell the Chicago Cubs baseball team and related assets, but officials said there are no plans to sell more of its newspapers.

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