Tribune gets $11.2 billion in debt commitments for public-to-private transaction

By Sara Rosenberg

New York, April 2 - Tribune Co. has received a total of $11.2 billion of debt financing commitments to help back its public-to-private transaction, according to a company news release.

Citigroup, Merrill Lynch and JPMorgan have provided the commitments.

In the first stage, Tribune will raise $7 billion of new debt, of which $4.2 billion will be used to complete a cash tender offer for about 126 million shares at $34.00 per share, and the remaining $2.8 billion will be used to refinance existing credit facilities.

In the second stage, Tribune will raise an additional $4.2 billion of debt, which will be used to buy all the remaining outstanding shares of the company.

Tribune's existing publicly traded bonds are expected to remain outstanding.

The cash tender offer is expected to be completed in the second quarter and the purchase of the remaining shares is expected to be completed in the fourth quarter.

The going private transaction is being supported by Sam Zell with a $315 million investment.

Upon completion of the transaction, the company will be privately held, with an Employee Stock Ownership Plan holding all of Tribune's then-outstanding common stock and Zell holding a subordinated note and a warrant entitling him to acquire 40% of Tribune's common stock.

Tribune is a Chicago-based media company.

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