Tribune Co.: The PHONES Proposal Harvard Case Solution & Analysis

Tribune Co. is considering issuing structured notes to monetize their investment in another company, America Online (AOL). Tribune initial investment in AOL in 1991 and currently has about 10 million shares to the left of that investment. However, these shares are worth more than $ 1.5 billion now, and if Tribune sells shares directly, capital gains will be almost the entire amount. To get rid of these shares more tax efficient way, Merrill Lynch CFO Tribune suggested that the company will release a new convertible security, known as PHONES, part hybrid version Note Replacement safety. "Hide
by George Chacko, Andrew Coleman, Eli P. Strick Source: Harvard Business School 31 pages. Publication Date: March 14, 2005. Prod. #: 205087-PDF-ENG

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