Publications
Publications
- March 2005
- HBS Case Collection
Tribune Company: The PHONES Proposal
Abstract
The Tribune Co. is considering issuing a structured note to monetize its investment in another company, America Online (AOL). Tribune originally invested in AOL in 1991 and currently has approximately 10 million shares left of that investment. However, these shares are worth over $1.5 billion now, and if Tribune sells the shares outright, the capital gain will be nearly this entire amount. To dispose of these shares in a more tax-efficient manner, Merrill Lynch has suggested to Tribune's CFO that the firm issue a new convertible security known as a PHONES, Participating Hybrid Option Note Exchangeable Security.
Keywords
Citation
Chacko, George C., Andrew Kuhlman, and Eli Strick. "Tribune Company: The PHONES Proposal." Harvard Business School Case 205-087, March 2005.