The Five Dumbest Things on Wall Street This Week

3. Self-Tender Is the Night

The tenderhearted folks at Tribune (TRB Quote) are under attack.

Two weeks ago, the Chicago-based publisher rolled out a plan to take on a huge chunk of debt and buy back a quarter of its stock. Tribune says the $2 billion program will help it reinvigorate its languishing TV-and-newspaper portfolio. Critics say an underperforming, unimaginative management is simply entrenching itself at holders' expense.

Now the Chandler family, which through two trusts owns 12% of Tribune, is agitating for change at the top. The family signaled last week that it didn't agree with CEO Dennis FitzSimons' vision, and this week it called on the board to take charge.

The Chandlers want to put Tribune on the block if the company won't quickly split its publishing operations from its broadcast assets. They say FitzSimons' big buyback isn't the answer to the many questions looming over Tribune.

"Tribune's strategic missteps are now reflected in a market-valuation multiple that is well below its peers," a Chandler filing says, noting the stock's 47% decline over two years leading up to the self-tender announcement. "Management's self-tender is simply a financial device that increases the company's risk profile and undercuts the financial flexibility for necessary fundamental challenges. We believe that this sequencing -- financial structure in advance of strategy -- is backwards."

The Chandlers aren't alone in that view. Moody's became the latest agency to downgrade Tribune debt to junk Thursday, citing the buyback's balance sheet impact.

Tribune continues to stand by its plan, but some of its remarks smack of typical boardroom buck-passing.

"After receiving recommendations from management and the board's outside financial and legal advisors," lead independent director William Osborn said in a statement late Wednesday, "all the directors except those representing the Chandler Trusts approved the tender offer as being in the best interest of all shareholders."

Yes, only sound advice could have led to such a fine decision.

Dumb-o-Meter score: 85. "In a changing media environment, our commitment to quality journalism and service to our communities will continue to be a top priority," FitzSimons adds, deftly changing the subject.

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