The Tribune Co. is considering issuing a structured note its investment in another company to monetize America Online (AOL). Tribune originally invested in AOL in 1991 and currently has about 10 million shares of this investment on the left. However, these shares with a value of over $ 1500000000 are now, and if Tribune sold the shares outright, the capital gain is almost the entire amount. To dispose of those shares in a tax-efficient manner, Merrill Lynch has proposed to Tribune CFO tha … Read more »

The Tribune Co. is considering issuing a structured note its investment in another company to monetize America Online (AOL). Tribune originally invested in AOL in 1991 and currently has about 10 million shares of this investment on the left. However, these shares with a value of over $ 1500000000 are now, and if Tribune sold the shares outright, the capital gain is almost the entire amount. To dispose of those shares in a tax-efficient manner, Merrill Lynch has proposed to Tribune CFO that the company issue a new convertible security known as mobile phones, Participating Hybrid Option exchangeable security.
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from
George Chacko,
Andrew Kuhlman,
Eli P. knitting
Source: Harvard Business School
31 pages.
Release Date: 14 March 2005. Prod #: 205087-PDF-ENG
Tribune Co.: The PHONES proposal HBR case solution

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