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Following the study session with the Board, we began
the divestiture process. Since that time, Mosby
Matthew Bender management and Times Mirror staff have
been actively working with Goldman Sachs to prepare
financial statements and the offering memorandum and to
identify potential buyers.
In this process, we have adopted the following
strategy:
* * * * * * *
• Acquaint all interested parties with our desire
for a tax-efficient result and explore the
appropriate alternatives in detail in advance of
definitive bids with each party, because different
forms of transactions work with different bidders.
• Since it could be the case that a leveraged spin-
off would generate the same level of after-tax
cash proceeds as an asset sale, establish “straw-
man” values of a cash-for-assets sale and a
leveraged spin-off (much like our cable
transaction) to set a “floor” on the auction at a
high level.
* * * * * * *
Alternative Structures
The specific structure for the divestiture will depend
largely on the financial and operating profile of the
likely purchaser. With the assistance and advice of
Goldman Sachs, Ernst & Young, and Gibson, Dunn &
Crutcher, this process is being integrated with the
overall sale process to deliver the highest after-tax
value to Times Mirror and its shareholders. * * *
* * * * * * *
Planning Issues
Since we are early in the process, it is not clear what
the impact of this divestiture will be on Times
Mirror’s financial results. * * * The preferred tax-
efficient structures we will explore with potential
buyers would significantly lessen any potential
dilution. * * * [I]t is important to remember that
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