Tribune Co chairman and chief executive Dennis FitzSimons will step down as soon as the US$8.2 billion buyout of the media conglomerate closes and will leave the company at the end of the year, Tribune said on Wednesday.
The announcement came on the eve of the day when Tribune hoped the transaction would formally close, following reports its lenders were giving last-minute scrutiny to the deal.
FitzSimons' eventual departure had been expected since real estate magnate Sam Zell agreed in April to lead the buyout and take Tribune private. Zell is to become chairman once the deal closes, with US$315 million invested in the company and the right to buy 40 percent of its shares.
FitzSimons, 57, will leave Tribune with more than US$32 million in severance and stock holdings, based on an analysis of corporate disclosure statements filed by the company.
"It's the right time for this transition and for Tribune's 20,000 employees to hear a single voice from the top," he said in an e-mail to staff shortly before the announcement was made.
Tribune shares initially fell more than 6 percent on investors' nervousness about a potential last-minute snag in banks signing off on the buyout, based on a Chicago Tribune report that, citing anonymous sources, said the lenders were questioning executives and scouring company records. But the stock recovered following the announcement that FitzSimons is leaving, an apparent signal that the closing was on track.
Shares were down US$1.24, or 3.7 percent, to US$32.07 in afternoon trading on Wednesday after trading as low as US$30.81 earlier in the session.
Tribune owns nine daily newspapers, 23 television stations and the Chicago Cubs baseball team, which it has agreed to sell under terms set by Zell. The buyout will result in the publicly traded company becoming private.
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