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Tribune Co. Hires Consultants to Explore Options

Tribune Co. has taken another step toward the sale or break-up of the company, having announced yesterday that is has hired financial advisors Merrill Lynch and Citigroup to help determine its choices.

Chief executive Dennis FitzSimons has said that all options are possible, but that in order to maximize shareholder value, the initial focus will be to determine the best strategic alternatives for the company, writes Reuters.

Tribune announced last week that it had formed a committee to look at options that could create additional value for shareholders.

David B. Wilkerson, of MarketWatch, writes that while those alternatives could include the sale of specific newspapers or television stations or the entire company, the smartest play seems to be taking Tribune private.

He points out that Tribune Co. faces the same challenges that other newspaper groups face across the country: declining ad revenue, particularly in movies, technology, real estate and retail; rising newsprint costs; and declining circulations.

John Miller, vice president and assistant portfolio manager at Ariel Capital - one of Tribune’s largest shareholders - says he doesn’t know what the company could have done to stem the tide, considering the issues the industry as a whole is facing.

“I think they’ve done a really good job in managing the business, given the economics of the industry. So I think it was just a case of having an unhappy large shareholder, in the case of the Chandlers,” he is quoted as saying.