As the Tribune Company prepares to decide whether to put its newspaper and TV properties up for sale next week, LA businessmen Ron Burkle and Eli Broad may submit another bid after finding out that the company is seriously considering a revised proposal from Chicago real estate developer Sam Zell.
The Chicago Tribune, which along with the Chicago Cubs, The Baltimore Sun and the LA Times would be part of such a sale, cites an unnamed source connected with Burkle and Broad as saying that their group have not had a chance to review Zell’s bid and that they have a right to determine whether they can beat his offer.
Tribune’s special committee is leaning toward Zell’s proposal, which is worth about $8 billion, or $33 a share, and is structured around an employee stock ownership plan (ESOP), which the management committee overseeing the strategic review have previously been concerned about risking workers’ retirement. Another plan involves spinning off the company’s broadcast assets and taking on debt to fund a dividend for existing shareholders in the range of $18 to $20 a share.
The committee has a self-imposed deadline of March 31 to decide on whether to accept any of these proposals.
Burkle and Broad had previously participated in four-month formal auction that ended in January and also featured bids from the Carlyle Group and The Chandler family, which owns a 20 percent stake in the Tribune. All offers were rejected. Then Tribune management entered into negotiations with Zell separately.
The two LA businessmen, who’s previous bid was structured around a leveraged buyout, could eventually outmaneuver Zell with a variation of his ESOP scheme.
NYT Dealbook: In a profile of Zell, he says his interest in buying the Tribune is not based on any particular affection for newspapers. Rather he seems himself as “an opportunist” as he told the AP last week, adding, “I probably am not as pessimistic about the future of the newspaper business as others might be.”
Related:
—Tribune Watch: Zell Would Take Trib Private; Invest $300 Million; Become Chairman
—Tribune: Chicago Developer Zell’s Last-Minute Proposal Gets Hearing