CHICAGO, July 1 -- Tribune Co. announced Monday it will acquire Renaissance Communications Corp., which owns six television stations, for $1.13 billion in cash. The transaction would make Tribune the nation's largest television group, reaching 33.4 percent of the nation's households and give it stations in eight of the top 11 markets. It also would be a major boost to its fledgling WB Network. Renaissance stations in Dallas and Miami are WB Network affiliates while those in Sacramento, Calif., Indianapolis, Hartford, Conn., and Harrisburg, Pa., are affiliated with the Fox Network. The deal is the latest in a scramble among major players to take advantage of the easing of ownership limits for TV stations and the consolidation in the industry. Last summer, Walt Disney Co. led the way when it announced plans to buy Capital Cities/ABC for $19 billion. Westinghouse Electric Corp. subsequently agreed to buy CBS for $5.4 billion. Tribune agreed to pay $36 a share for Renaissance, representing a premium of slightly over 11 percent to its closing price Friday of $32. 25. Renaissance shares were up $1.625 to $33.875 in trading on the New York Stock Exchange, while Tribune gained $1.25 to $73.875. 'Tribune will be a much larger independent information and entertainment company in the next century,' said John W. Madigan, chairman, president and chief executive. 'Today's television transaction demonstrates Tribune's commitment to grow significantly in a consolidating media marketplace, just as our recent education acquisitions have made us a national leader in supplemental education,' he said.
'This is unquestionably an excellent move to drive shareholder value.' Dennis FitzSimons, executive vice president, said loosened ownership restrictions have eased consolidation, which will allow Tribune to stay in the first tier of broadcast groups. 'Our industry is growing more competitive, and that will result in better products and services for the viewer,' he said. The transaction is subject to regulatory and Renaissance shareholder approval and is expected to be completed in early 1997. Tribune said the deal should boost cash flow during the first full year and will hold down 1997 earnings by about 10 percent primarily because of the amortization of goodwill. More than 50 percent of Renaissance's outstanding stock is owned by New York investment company Warburg Pincus Capital Co. L.P., which has agreed to back the deal. Warburg Pincus and Renaissance chairman Michael Finkelstein launched the company in 1989 and took it public in February 1994. Renaissance had 1995 revenues of $179 million. Tribune owns and operates television stations in New York, Los Angeles, Chicago, Philadelphia, Boston, Atlanta, Houston, Denver, San Diego and New Orleans. It manages a station in Washington, D.C. The company owns several newspapers including the Chicago Tribune, the Chicago Cubs baseball team and Chicago Bulls basketball team. It also owns a minority interest in the WB network, in partnership with Time Warner Inc., and has a minority interest in Qwest Broadcasting LLC, which operates WATL-TV in Atlanta and WNOL-TV in New Orleans.