(story to be published in tomorrow’s issue, March 14)
Tribune Co. is in talks to buy Times Mirror Co. for $8.1 billion in cash, stock and assumed debt to create one of the biggest U.S. newspaper publishers, Dow Jones reported yesterday, citing people familiar with the matter. Tribune would pay $6.5 billion in cash and stock and assume $1.6 billion of debt, Dow Jones said. The talks were also reported on the Tribune’s web site as well as by the interactive edition of the New York Times. The purchase of Los Angeles-based Times Mirror would give Tribune daily papers in the three biggest U.S. markets and double its annual revenue, surpassing that of USA Today publisher Gannett Co. Tribune owns the Chicago Tribune, the Chicago Cubs baseball team and 22 television stations. Times Mirror’s papers include the Los Angeles Times, Newsday in New York and the Baltimore Sun. Times Mirror, led by Chairman Mark Willes, has been trying to boost circulation and is selling unsuccessful units to boost profits. Its stock fell 15 percent in the past year and is down 33 percent from its 52-week high. The shares closed at 47 15/16 Friday, down 1 1/4. Tribune stock fell 2 5/16 Friday to 37 3/16. While analysts have approved of Willes’s strategy, some say he must invest more of the company’s cash in new businesses. Competitors, especially Tribune, have been pumping money into the Internet, either forming online companies of their own or taking stakes in others. Willes instead has led a campaign to boost readership of the Times, with a goal of reaching a circulation of 1.5 million by adding local community sections, among other moves. As of Sept. 30, the paper had a circulation of 1.08 million, almost 11,000 copies more than a year earlier. A sale of Times Mirror may in part reflect dissatisfaction with management by the Chandler family, which has controlled the company for more than a century. Otis Chandler, the former Times publisher and chairman of Times Mirror, criticised Willes and publisher Kathryn Downing for what he considered their lack of knowledge about the newspaper business and a revenue-sharing agreement for a special section at the paper. In addition to the Times, Newsday and Baltimore Sun, Times Mirror publishes the Hartford Courant and several smaller papers. It also owns the Jeppesen Sanderson flight information business and a group of special-interest magazines including Field & Stream and Outdoor Life. Times Mirror last year earned $259 million, or $3.38 a share, from continuing operations on $3 billion in revenue. Tribune earned $415 million, or $1.54 a share, on revenue of $3.2 billion. Reuters