Ever have that nightmare where you plan a party an no one shows up. That must be the feeling that Tribune’s bankers are having today.
The LA Times (via Romenesko) offers a good rundown about what’s ahead for its troubled corporate parent.
“The Chicago-based media company, which owns newspapers including the Los Angeles Times and the Chicago Tribune, as well as two dozen TV stations, probably will draw several nonbinding proposals from a number of investment firms. But in a mark of tepid enthusiasm, the offers are expected to come in only slightly above Thursday’s closing price of $33.79, near a one-year high of $34.28 for the stock, which has been buoyed by speculation about a deal. Industry observers expressed skepticism that the investment firms would follow through with formal bids.’”
This would be a catastrophe in any other deal when it’s a given that a seller would get a big premium over its stock price. Tribune couldn’t have expected much going into the process given that the pressure its facing from shareholders is well known, giving buyers an advantage. Keep in mind that it’s in the buyers’ best interest to “talk down’” the deal so they can get the lowest price out of Tribune.
The Times lays out several scenarios for the bidding process including Tribune, fearing a huge drop in its stock price, accepting a modest premium, or scrapping the bids and taking offers for individual properties. Among the assets expected to attract considerable interest is Tribune’s stake in the CareerBuilder job listings Web site and TV’s Food Network along with the Chicago Cubs. Tribune executives may decide to take the company private themselves and spin off its television stations, the Times reports.
If there is a buyout of the entire company, parts of Tribune will likely be sold off piecemeal as was the case with Knight-Ridder.