UPDATE: Eli Broad and Ron Burkle look to be back in this endless bidding. Tribune Co. has responded to a request for additional financial information from the two Los Angeles billionaires.
There’ve been lots of reports that multimedia corporation Tribune Co. is close to accepting real estate tycoon Sam Zell’s $8 billion takeover offer that will load up the company with debt. Owner of a TV stations group, the Los Angeles Times and the Chicago Cubs among many infotainment holdings, Trib will probably seal the deal by the end of the week, according to Bloomberg News. This jibes with Trib’s self-imposed deadline of March 31. Zell’s offer of $33 a share is 6.8% above yesterday’s stock price, which has been sinking while the sale drags on, and on. Zell’s offer was competing with the company’s own plan to reorganize, and seems to have beaten offers from the Chandler family and from Los Angeles billionaires Ron Burkle and Eli Broad. But that duo is charging that Trib didn’t treat them fairly during the auction process. They claim that Zell was given info they weren’t. Zell, a Chicago native, said this month he plans to keep the company’s television stations and newspapers intact, along with other holdings. Zell proposed creating an employee stock ownership plan to help finance billions of dollars of debt for the acquisition. The structure would shield the company from a large tax bill. Zell altered the mix of debt and equity and raised his offer to help allay the company’s concerns that employees would take on too much risk. Trib’s own idea was to spin off its 23 television stations and pay shareholders a one-time dividend funded by debt. The dividend was designed to appease the Chandler family, who once owned the Los Angeles Times. Zell’s proposal would give the family an exit and would take the entire company private. Zell entered Tribune’s auction in February as he prepared to sell his Equity Office Properties Trust to Blackstone Group LP for $39 billion.