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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): March 13, 2000
TRIBUNE COMPANY
(Exact name of Registrant as Specified in its Charter)
Delaware 1-8572 36-1880355
(State or other (Commission File (I.R.S. Employer
jurisdiction of incorporation Number) Identification No.)
or organization)
435 North Michigan Avenue, Chicago, Illinois 60611
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code:
(312) 222-9100
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ITEM 5. OTHER EVENTS.
On March 13, 2000, Tribune Company (the "Company") executed an
Agreement and Plan of Merger (the "Merger Agreement") with The Times Mirror
Company ("Times Mirror"), pursuant to which, and subject to the terms and
conditions set forth therein, among other things, (i) the Company will make a
cash tender offer (the "Offer") for up to 28 million shares (approximately 48%)
of the outstanding Series A common stock and Series C common stock of Times
Mirror (collectively, the "Times Mirror Common Stock") at a price of $95 per
share of Times Mirror Common Stock, and (ii) following completion or expiration
of the Offer, Times Mirror will merge with and into the Company (the "Merger")
in a transaction in which each Times Mirror stockholder will receive 2.5 shares
of common stock of the Company ("Company Common Stock") for each share of Times
Mirror Common Stock. In addition, if fewer than 28 million shares of Times
Mirror Common Stock are purchased in the Offer, Tribune may purchase Times
Mirror shares in the market and Times Mirror stockholders may elect, in the
Merger, to exchange each share of Times Mirror Common Stock for (i) $95 in cash,
up to the balance of the 28 million shares, or (ii) 2.5 shares of Company Common
Stock.
Consummation of the Offer is conditioned upon at least 15 million
shares of Times Mirror Common Stock being validly tendered and not withdrawn in
the Offer. Consummation of the Offer and the Merger is subject to regulatory and
other customary conditions, including the expiration or termination of any
waiting period (and any extension thereof) under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended. In addition, the Merger is subject to the
approval of Times Mirror's stockholders and the Company's stockholders.
The Chandler Trusts have executed a voting agreement pursuant to
which and subject to the terms and conditions of which, among other things, the
Chandler Trusts have committed to vote their shares of capital stock of Times
Mirror in favor of the Merger Agreement and the transactions contemplated
thereby, including the Merger.
The Company expects the Offer to be completed in mid-April 2000 and
the Merger to be completed in the second or third quarter of 2000. The Company
expects the Merger to be tax-free to Times Mirror stockholders to the extent
they elect to take Company Common Stock in the Merger.
On March 13, 2000, the Company issued a press release announcing the
Merger Agreement, the Offer and the Merger. A copy of such press release is
attached hereto as Exhibit 99.1.
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ITEM 7. EXHIBITS.
Exhibit No. Description
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99.1 Press Release, dated March 13, 2000.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TRIBUNE COMPANY
(Registrant)
Date: March 13, 2000 By: /s/ Crane H. Kenney
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Name: Crane H. Kenney
Title: Vice President, General
Counsel and Secretary
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EXHIBIT INDEX
Exhibit No. Description
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99.1 Press Release, dated March 13, 2000.
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EXHIBIT 99.1
Tribune Company Corporate Relations Department
435 North Michigan Avenue TRIBUNE 312/222-3238
Chicago, Illinois 60611 FAX: 312/222-1573
PRESS RELEASE
TRIBUNE COMPANY AND TIMES MIRROR TO MERGE
TO FORM NATION'S PREMIER MAJOR MARKET MEDIA COMPANY
MERGER CREATES NATIONAL PLATFORM FOR MULTI-MEDIA, INTERACTIVE GROWTH
TRANSACTION ACCRETIVE TO CASH EPS IN FIRST FULL YEAR
CHICAGO AND LOS ANGELES, MAR. 13, 2000 -- Tribune Company and The Times Mirror
Company announced today that they have signed a definitive agreement for a
merger of the two companies in a cash and stock transaction valued at
approximately $8 billion. The transaction will create the nation's premier local
market multi-media company, combining national reach and a major presence in 18
of the nation's top 30 U.S. markets, including New York, Los Angeles and
Chicago.
Following completion of the merger, Tribune Company will have 11 daily
newspapers, 22 television stations and four radio stations. The combined company
will be one of the largest providers of interactive news and information
services in the U.S. and the largest multi-media company in four of the nation's
five most populous states--California, New York, Illinois and Florida.
"Our new company will be the best positioned local market media company for the
future," said John W. Madigan, Tribune chairman, president and chief executive
officer. Madigan pointed to the following key strategic and economic benefits of
the merger:
o Combines leading print, broadcast, and Internet assets in the top three
markets and ideally positions the company to provide consumers and
advertisers a robust array of media choices.
o Led by top interactive sites in New York, Los Angeles and Chicago, creates an
Internet company with approximately $55 million in projected 2000 revenue and
an estimated 3.4 million unique monthly visitors. This puts the combined
company in the top 20 ranking for news/information/entertainment interactive
services.
o Creates a compelling set of marketing solutions in top metro newspaper
markets, increasing revenue from the rapidly expanding national advertising
category, including national retailers.
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o Brings together a worldwide newsgathering organization of extraordinary
quality, scope and depth, providing the public in the communities served with
news and opinion that is both diverse and comprehensive.
"National scale and local depth across media will drive our top line growth.
Just as our acquisition of KTLA-TV in 1985 created our national broadcasting
footprint, this merger extends that opportunity across broadcasting, newspapers
and our interactive businesses," Madigan said.
"Tribune Company would not have engaged in this transaction if they did not have
the highest regard for our newspapers and other businesses. Our hope and
expectation is that they will build on the legacy of greatness that comes with
each Times Mirror company. Theirs is a large and well-managed corporation, and
one that is also very supportive of the communities it serves," said Mark H.
Willes, chairman and chief executive officer of The Times Mirror Company.
"Tribune Company is the single best strategic partner for Times Mirror," said
Warren B. Williamson, chairman of the Chandler Trust, Times Mirror's longtime
largest shareholder. "We are looking forward to a long, happy partnership with
Tribune and its shareholders."
CREATING POWERFUL SOLUTIONS FOR ADVERTISERS, CHOICES FOR CONSUMERS
"In a world that is increasingly fragmented, local, branded mass media providers
will remain the most valuable resource for advertisers looking to reach a mass
audience with impact and frequency," said Dennis J. FitzSimons, Tribune
executive vice president. "Advertiser demand is strong and getting stronger,
fueled by dynamic segments of our economy, such as dot.coms, wireless
communications providers, health care and financial services.
"Our combined company provides unprecedented opportunities for advertisers to
reach major market consumers in any media form--broadcast, newspapers or
interactive. In addition, the combined company will benefit consumers by giving
them rich and diverse choices for obtaining the news, information and
entertainment they want anytime, anywhere," FitzSimons added.
WORLD CLASS, WORLDWIDE NEWSGATHERING
Jack Fuller, Tribune Publishing president, pointed to a shared heritage of
newspaper excellence as a value that binds the two companies. "This merger is a
means of keeping great newspapers and the great public service they provide to
their local communities thriving in a dynamically changing and increasingly
competitive marketplace for news and information. Our respective organizations
are two of the most honored in our profession and are known for their standards
of integrity and ethics. We believe the strategic fit is absolutely perfect,"
Fuller said. He noted that the combined company has won 80 Pulitzer Prizes.
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Fuller also noted that the combined company will have an expanded presence in
foreign bureaus and Washington, D.C., and increased national coverage from other
bureaus around the U.S. "We'll have premier international and national coverage,
and deep, extensive coverage of Washington," said Fuller. He emphasized that the
Times Mirror newspapers, like Tribune's newspapers, would continue to operate to
the highest standards and with editorial independence.
NATIONAL SCALE IN INTERNET WITH DEEP LOCAL IMPACT
The combined company's Internet assets will provide marketers with a powerful
network that reaches a national audience and delivers deep local market impact.
"This scale will enable us to bring powerful news and information services to
our markets, as well as world-class technology. In addition, multiple media are
becoming essential on the Internet and will be more so on emerging broadband
networks. The combined multi-media newsgathering resources and technology assets
will allow us to deliver compelling broadband news, advertising and information
choices to consumers in the future," said Jeff R. Scherb, Tribune Company's
chief technology officer and Tribune Interactive president.
BENEFITS OF TELEVISION/NEWSPAPER OWNERSHIP IN BIG THREE MARKETS
Building on Tribune's existing television/newspaper presence in Chicago, the
transaction will add television/newspaper combinations in three markets--New
York, Los Angeles and Hartford, Conn. Madigan emphasized the benefits of
cross-ownership in the nation's three largest media markets. "As we have learned
in Chicago, cross-ownership provides us with an opportunity to provide quality
news and information across media channels--in print, over the air and online--
and take advantage of cross-promotional programs and creative, cross-media
advertising sales opportunities," he said.
FINANCIALLY ACCRETIVE TRANSACTION, FASTER GROWTH BUILDS VALUE FOR SHAREHOLDERS
"A major portion of the value creation opportunities from this combination will
be derived from faster revenue growth in our media businesses," said Madigan.
Tribune expects to generate incremental cross-media, national advertising and
Internet revenues of $60 million in 2001, growing to $200 million in 2005. These
high margin revenues, combined with significant expense savings, will accelerate
cash flow growth. Incremental cash flow is expected to be approximately $125
million in 2001, growing to $350 million in 2005.
The transaction is expected to be accretive to cash EPS in its first full year
(2001). (Cash EPS is defined as diluted earnings per share before amortization
of goodwill and intangibles). After initial dilution to reported earnings per
share of approximately 16 percent, the transaction is expected to be accretive
to reported earnings per share within three years, and to increase the company's
long-term EPS growth rate by 1 to 2
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percentage points. The combined media businesses will have annual revenue of
more than $7 billion and more than $2 billion of cash flow.
The transaction values Times Mirror at approximately 10.5x 2000 EBITDA and 8.5x
2001 EBITDA, after synergies. Related to the transaction, the Tribune board of
directors has authorized share repurchases of up to $2.5 billion. Assuming the
tender offer is fully subscribed, Tribune expects to repurchase up to $700
million of its stock to achieve the equivalent of a 50-50 stock/cash
acquisition.
FOCUS ON CORE MEDIA BUSINESSES
Madigan stated that the company is focused on its media businesses to drive
future growth. "This merger provides us an exceptional opportunity to accelerate
growth and create value in our core media businesses," he said.
"Tribune has been a leader in the consolidation occurring in the television
business. We intend to continue aggressively building our television group,
increasing both national reach and multiple stations in markets as now permitted
by FCC rules," said Madigan. "We see the same consolidation opportunities in the
newspaper business, and this transaction puts us ahead in this effort."
"We were attracted to the transaction because of the strength of Times Mirror's
core media properties. In addition, Times Mirror has two other highly regarded
business segments--Times Mirror Magazines and Jeppesen, the nation's leading
flight information company. While not part of our core media focus, these are
strong businesses with great brands and market positions and bright futures. We
plan to work with their management teams to find the best way to maximize the
potential of these businesses," Madigan said.
SHARED COMMITMENT TO THE COMMUNITY
Madigan noted that the two companies share a rich heritage of service to the
community and commitment to their charitable activities. "We respect and will
continue Times Mirror's historic commitment to Los Angeles, and look forward to
working with the Times Mirror Foundation to ensure that this commitment is
reinforced and enhanced in the years to come," Madigan said. Tribune Company and
the McCormick Tribune Foundation together donated $5 million to Los Angeles
community groups in 1999.
MERGER TERMS, TIMING AND APPROVALS
Tribune will make a cash tender offer for up to 28 million Times Mirror shares
(approximately 48 percent of shares outstanding) at a price of $95 per share.
Following completion of the tender offer, Tribune and Times Mirror will merge in
a transaction in which each Times Mirror common share is converted into 2.5
shares of Tribune common stock. In addition, if fewer than 28 million Times
Mirror shares are purchased in the
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tender offer, Tribune may purchase Times Mirror shares in the market and permit
Times Mirror shareholders to elect cash in the merger, up to the balance of the
28 million shares.
Four new directors, Jeffrey Chandler, Roger Goodan, William Stinehart, Jr., and
Thomas Unterman, will be added to the Tribune board of directors, bringing the
number of Tribune board members to 16.
The merger is subject to the approval of the shareholders of both companies. It
is also subject to other customary conditions, including Hart-Scott-Rodino
clearance. The Chandler Trusts have signed a voting agreement committing to vote
their shares in favor of the transaction, subject to the provisions of the
agreement. The companies expect the tender offer to be completed in mid-April
and the merger to be completed in the second or third quarter of 2000. The
companies expect the transaction to be tax-free to Times Mirror Company
shareholders who elect to take Tribune stock.
Because the transaction does not require the transfer of any broadcast station
licenses, no Federal Communications Commission (FCC) approval is required to
complete the merger. The FCC's policy provides that the newly created
television/newspaper combinations may be held until the next license renewal.
License renewals for Tribune television properties are in 2006 (Los Angeles and
Hartford) and 2007 (New York). If the cross-ownership rule has not been modified
by that time, a waiver would be needed to allow continued ownership. The company
expects that by the time its television licenses are up for renewal, the
cross-ownership issue will be resolved favorably.
TRIBUNE (NYSE: TRB) is a leading media company with operations in television and
radio broadcasting, publishing, education and interactive ventures. It is an
industry leader in venture partnerships with new-media companies. In 2000, for
the third straight year, Tribune ranked No. 1 among its industry peers in
Fortune magazine's list of most-admired companies in America. More information
on Tribune is available on the Internet at www.tribune.com. Earnings and other
news releases also can be accessed by calling 1-800-757-1694.
TIMES MIRROR (TMC-- New York and Pacific stock exchanges), a Los Angeles-based
news and information company, publishes the Los Angeles Times, Newsday, The
Baltimore Sun, The Hartford Courant, The Morning Call, The (Stamford) Advocate
and Greenwich Time. In professional information, Jeppesen is a leading provider
of print and electronic flight information services, and Times Mirror Magazines
publishes leading consumer magazines, including Field & Stream, Popular Science,
GOLF Magazine and Outdoor Life. More information about Times Mirror is available
on the company's Web site, www.tm.com.
This press release contains certain comments or forward-looking statements that
are based largely on the company's current expectations and are subject to
certain risks, trends and uncertainties. Such comments and statements should be
understood in the context of Tribune's and Times Mirror's publicly available
reports filed with the SEC, including the most current annual report, 10-K and
10-Q, which contain a discussion of
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various factors that may affect the company's business. These factors could
cause actual future performance to differ materially from current expectations.
Tribune Company and The Times Mirror Company are not responsible for updating
the information contained in this press release beyond the published date, nor
for changes made to this document by wire services or Internet service
providers.
MEDIA CONTACTS:
Katherine Sopranos
Tribune Company
Cell 312-320-5339
312-222-4204
Martha H. Goldstein
The Times Mirror Company
213-237-3727
Andrea Roebker
Hill & Knowlton
323-966-5751
MEDIA NOTE:
SATELLITE TRANSMISSION:
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MEDIA CALL-IN: 800-314-7867, confirmation 210374
Replay: 888-203-1112, confirmation 210374
