Chandler Family Threatens Tribune With Proxy Fight

WSJ reports that yet another complication has surfaced in the battle for control over Tribune Co.'s newspaper and TV empire: its biggest shareholder, the Chandler family, could mount a proxy fight for additional Board seats. The family currently holds three seats on tribunes 11 member board; a proxy contest could net them another two, leaving them short of full control, but in a powerful position. While the family would prefer to avoid such a battle, it's likely to happen if Tribune's board doesn't accept its acquisition proposal, or pursue a transaction that suits the family, sources say. The Chandler family is concerned with what it perceives as the Board's over-involvement in the auction process; they have been forbidden to approach private equity firms that signed confidentiality agreements with Tribune but never submitted bids. The family believes it could bid higher were allowed to pursue additional funding. The Board is dissatisfied with the Chandler's bid, which would have Tribune spin off its TV stations, while the Chandlers buy the newspapers for $4.7 billion. The Chandlers are also unhappy with a bid proposal from tycoons Ron Burkle and Eli Broad which calls for Tribune to borrow and pay a big debit dividends to shareholders; the family feels such an agreement would saddle the company with too much debt.

• Sources: Wall Street Journal
• Related commentary: Trying to Sort Out Tribune Bids After Sale Deadline Passes, Tribune Co.'s Second Largest Shareholder Hires Outside Adviser in Possible Break With Management, Tribune Could Be Bought Out By Two LA Billionaires
• Potentially impacted stocks and ETFs: Tribune Company (TRB), The New York Times Co. (NYT), Washington Post Company (WPO), Gannett Co. Inc. (GCI), McClatchy Company (MNI)

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