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Tribune Co. mulls unit sale
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April 3, 2000: 1:57 p.m. ET
Media giant mulls sale of education group pending merger with Times Mirror
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NEW YORK (CNNfn) - Tribune Co. announced on Monday that it is considering options for its education group, including its possible sale, in order to streamline its media, publishing and interactive operations prior to the publisher's $8 billion merger with Times Mirror Co.
Chicago-based Tribune (TRB: Research, Estimates) hired Salomon Smith Barney to investigate alternatives for its education group, which is the top publisher of supplemental education materials in the United States, with annual sales of about $400 million.
Analysts speculate that a sale of the education group could fetch up to $600 million.
The group publishes children's books and non-fiction consumer titles, specializing in supplementary materials for elementary and secondary schools. The education group includes the divisions: Everyday Learning/Creative Publications Group; Instructional Fair Group; Landoll Inc.; NTC/Contemporary Publishing Group; and The Wright Group.
 "With our pending merger with The Times Mirror Company, we are focused on our core media businesses of broadcasting, publishing and interactive," said John Madigan, Tribune's chairman, president and chief executive officer.
Tribune, owner of the Chicago Tribune, agreed on March 13 to acquire Times Mirror (TMC: Research, Estimates), publisher of the Los Angeles Times in an $8 billion cash and stock deal that will create a media giant with combined revenue of over $7 billion and cash flow of more than $2 billion.
The announcement was no surprise to analysts who said the company was considering selling its education operation even before news of the merger.
"They had talked about that possibility," said Barrington Research analyst James Goss. "Between publishing and broadcasting and interactive, that provides them with enough to do."
Tribune Education struggled to deliver profits in late 1999. Despite reporting revenue growth of about 3 percent, the unit's operating profit in 1999 slipped 20 percent to about $35 million, as a result of fourth-quarter sluggishness in its retail sector, which specializes in trade and children's books.
Shares of Tribune rose 1 to 37-9/16 in moderate trading on Monday. 
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