Tribune Reaches $2.73 Billion Deal for Local TV

Tribune Co. (TRBAA) reached a $2.73 billion agreement to acquire all 19 of Local TV Holdings LLC's television stations, a move that will transform Tribune into the largest commercial TV station owner in the U.S.

The list of potential bidders for Local TV had included Sinclair Broadcast Group Inc. (SBGI), Meredith Corp. (MDP), Tribune and others.

The acquisition of Local TV, owned by private-equity firm Oak Hill Capital Partners, will increase Tribune's stations in the U.S. to 42. Tribune, owner of a string of newspapers and broadcast stations, emerged from bankruptcy protection at the end of 2012, after a prolonged fight over confirmation of its Chapter 11 plan.

The deal is expected to provide scale that will allow Tribune to expand its advertising and video and digital distribution opportunities and provide a stronger position in negotiations with affilates about distribution.

Tribune expects the combination will generate more than $100 million in annual savings within five years after the deal closes, which is expected by year's end.

Tribune has received committed financing of up to $4.1 billion from J.P. Morgan Chase & Co. (JPM), Bank of America Corp.'s (BAC) BofA Merrill Lynch arm, Citigroup Inc. (C), Deutsche Bank AG (DB) and Credit Suisse Group AG (CS, CSGN.VX), including a new $300 million revolving credit facility and the capacity to allow Tribune to refinance its existing debt.

Tribune shares closed Friday at $56.90 and were inactive premarket.

Write to Tess Stynes at [e-mail]

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