Times Mirror Considering Delaware Reincorporation

Times Mirror revealed Monday that it is considering reincorporating in Delaware, where state laws would allow it to change its corporate bylaws in ways that would discourage a hostile takeover bid.

The Los Angeles-based company, owner of various media interests and publisher of the Los Angeles Times, Newsday on Long Island and six other newspapers, said it may propose a Delaware reincorporation to its board later this year. The company now is incorporated under California law.

Times Mirror made the disclosure in papers outlining its tender offer, launched Monday, to buy up to 10.4% of its outstanding stock, roughly 7.5 million shares, at $60 a share. The $450-million buy-back plan, which was announced Friday, would raise the amount of Times Mirror shares controlled by officers and directors of the company and affiliated interests from roughly 36% to 40%.

In composite stock trading Monday, 1,477,300 shares of Times Mirror stock were sold, making it the second most active issue on the New York Stock Exchange. The stock closed up $4 at $57.75.

Times Mirror President and Chief Executive Robert F. Erburu said Monday that, in addition to discouraging a hostile takeover bid, the company had two other reasons for the tender offer.

First, it already intended to buy back at least 5 million shares for employee benefit plans, including a stock ownership program. Second, the company viewed its own stock as a good investment because the prices for other media properties, such as television stations, are inflated by the current environment of mergers and acquisitions.

Moody’s Investors Service, the bond rating company, said Monday that it will review and perhaps reduce its rating of Times Mirror’s senior debt and commercial paper because of the increased debt required to finance the offer. Times Mirror said it expects to refinance some or all of the anticipated $450 million in short-term debt into medium- or long-term notes. The company’s long-term debt currently is about $500 million.

In another development Monday, Times Mirror completed its exchange of several cable-television systems, involving 446,300 households, with Storer Communications.