Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

The Times Set for Tribune Co. Takeover

LOS ANGELES -- Times Mirror Co., parent company of the Los Angeles Times, has agreed to be taken over by Tribune Co., owner of the Chicago Tribune and more than two dozen other media properties.

The $6.38 billion transaction would create the United States third-largest newspaper company and end more than 100 years of local ownership of The Times by the Otis and Chandler families.

It would leave The Times - long the dominant news medium in California - as a wholly owned subsidiary of the Chicago-based Tribune Co. and make Los Angeles the largest city in the country without a locally owned metropolitan daily. The deal would also effectively mark the demise of Times Mirror at a time of increasing, large-scale media consolidation, marked most dramatically by the pending $163 billion merger announced two months ago by Time Warner and America Online.

The loss of Times Mirror would leave Atlantic Richfield Co. as the only remaining Fortune 500 company based in downtown Los Angeles, and Arco won't be an independent company if it is acquired by BP Amoco under a proposed deal awaiting antitrust approval.

Under the terms of the Times Mirror-Tribune deal, Times Mirror shareholders will have a choice of taking $95 per share from Tribune Co. or exchanging each of their Times Mirror shares for 2.5 shares of Tribune Co. stock (which represents about $93).

The offer represents a premium of almost double Friday's closing price of $47.94 for Times Mirror stock. That offer would be good for up to 28 million of Times Mirror Class A shares, which represent nearly 42 percent of the outstanding Class A and Class C shares. If the tender offer is fully subscribed, Tribune Co. will pay out $2.66 billion in cash. Tribune Co. also will assume $1.4 billion in Times Mirror debt.

The premium is one of the highest ever paid for a publicly traded company. Because the deal - which was approved late Sunday night by the Times Mirror board of directors - did not involve competitive bidding, it includes a mechanism under which other bidders would have 20 calendar days to top Tribune Co.'s offer.

Although the Tribune-Times Mirror deal must still be approved by shareholders, the Chandler family initiated the negotiations and owns 66 percent of the voting shares, which it has pledged to vote in favor of the deal.

Federal regulatory agencies also will review the terms of the transaction, but Mark Willes, chairman and CEO of Times Mirror, said late Sunday night that he would be "astounded" if the government raised any objections.

Negotiators worked around that concern by giving the Chandler family four seats on an expanded, 16-member Tribune Co. board and by giving them 40 percent of the membership of a new Los Angeles Times board.

The acquisition would give Tribune Co. daily newspapers in the country's three largest cities - New York (where Times Mirror owns Newsday), Los Angeles and Chicago, and is part of a long-range Tribune Co. strategy of owning multimedia assets in the same markets.