A large

Tribune

(TRB)

stakeholder is pushing its case for the breakup of the media company.

In what can only be described as a corporate call to arms, the Chandler family, which holds a 12% stake in Tribune, said in a Securities and Exchange Commission filing it wants management to separate the newspaper business from the TV station business. It also wants the board to explore other strategic alternatives including the sale of properties and to appoint a committee of independent directors to oversee the process.

Tribune, owner of the L.A. Times and a heap of TV stations, recently announced a $2 billion share buyback program and restructuring, to which the Chandler trusts objected. The Chandlers have three seats on Tribune's board.

The Chandlers also said they would not tender their shares as part of Tribune's process.

Tribune shares rose over 2% on Wednesday as investors reconsidered the prospect that the media giant will be sold.

A Tribune spokesman was not immediately available for comment.

In a letter to Tribune directors, the Chandler Trusts said they "believe that the process by which the offer was presented and considered by the Tribune Board was fundamentally flawed, and that the offer is a purely financial device that fails altogether to address the real business issues facing Tribune. Prompt and meaningful strategic action is required to preserve the premium value of the company's franchises."

The trusts say that the "basic strategic premise of the Tribune/Times Mirror merger was that the cross-ownership of multiple premium major media properties in the nation's three largest media outlets would provide a platform to produce above-industry performance for both its newspaper and broadcast assets and for strong growth in interactive and other media opportunities." The trusts say this strategy has failed, the company has underperformed industry averages and there is "scant evidence" that the next two years will be different.

Tribune said two weeks ago that it would buy back shares through a Dutch auction self-tender at $28 to $32.50 a share. Tribune also agreed to buy 10 million shares from the McCormick Tribune Foundation, a 13.5% stakeholder, at the tender offer price and 12 million shares in the open market afterwards. The repurchase is expected to amount to 25% of its common stock and to be paid for with bank debt and bonds.

At the same time Tribune committed to the sale of $500 million in noncore assets and $200 million in cost cutting over the next two years.