Peltz Buys 1.2% Stake in Tribune

Billionaire investor Nelson Peltz, no stranger to boardroom battles, has acquired a 1.2% stake in Tribune Co. in what experts said might be an attempt to profit from a dispute between the media company and its largest shareholders.

According to a filing Monday with the Securities and Exchange Commission, Peltz’s New York-based hedge fund, Trian Fund Management, bought 2.83 million Tribune shares during the quarter ended June 30.

The investment comes amid sharp criticism of Tribune management by California’s Chandler family, whose trusts control three of 11 Tribune board seats and about 15% of the stock.

Tribune’s stock has fallen 23.5% from a 52-week high of $38.93 reached Sept. 12. The Chandlers are demanding that the company spin off its television stations, sell assets or put itself up for sale. Tribune shares rose 7 cents to $29.78 on Monday.

Chicago-based Tribune’s assets include the Los Angeles Times, KTLA-TV Channel 5, the Chicago Tribune and the Chicago Cubs. A Tribune spokesman said the company had no comment on the Peltz investment.

Peltz, 64, is a former junk-bond investor who teamed with former takeover financier Michael Milken in the 1980s. Forbes has estimated Peltz’s personal fortune at $1.1 billion.

For five months, Peltz has been immersed in a bitter fight with ketchup giant H.J. Heinz Co. Unhappy with Heinz’s lagging stock price, Peltz has pushed for a radical restructuring that would slash more than $500 million in costs. Heinz management contends that such a move would cripple the company.

The dispute is set to climax at the company’s annual meeting Wednesday in Pittsburgh, where Peltz is pushing to elect five of his candidates to the board.

John C. Coffee Jr., a securities-law professor at Columbia University, said Peltz has evolved over the years from a takeover artist to an activist investor who doesn’t necessarily seek control of his target companies but uses his position to rally other institutional shareholders for changes that will boost the stock price.

“He may seek a board representative or an alliance with the Chandlers,” Coffee said.

Peltz has also brought his shareholder activism to the corporate parents of the Wendy’s fast-food chain and Cracker Barrel restaurants, successfully pushing for cost cuts at those companies.

Peltz, a father of 10 who lives in Bedford, N.Y., first won fame with his 1983 takeover of National Can Co., financed with high-yield, or “junk,” bonds from Milken’s financing group at the now-defunct Drexel Burnham Lambert. He soon added American Can to his holdings and later sold the combined operations at an $800-million profit.

Peltz scored another coup in turning around beverage maker Snapple, which he bought from Quaker Oats Co. in 1997 and sold three years later for $1.5 billion.

In 1991, however, Peltz’s record was tarnished when he and longtime business partner Peter W. May were censured by the London Stock Exchange over transactions involving development firm Mountleigh Group.