Nov 8, 2006 3:05 pm US/Central
LA Billionaires Bid On Tribune Co.
LOS ANGELES (AP) ―
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Billionaire businessman Eli Broad and supermarket magnate Ron Burkle have teamed up to submit a bid for Tribune Co., The Associated Press has learned.
AP
Billionaire businessman Eli Broad and supermarket magnate Ron Burkle have teamed up to submit a bid for the Tribune Co., The Associated Press has learned.
Details of the offer by the companies controlled by the two businessmen were not disclosed. A person familiar with the offer who was not authorized to publicly discuss it confirmed Wednesday the bid had been submitted.
Broad declined to comment on the report. A call to Burkle's office was not immediately returned.
The bid comes one day after Chicago-based Tribune Co. replaced Dean Baquet as editor of the Los Angeles Times because Baquet refused to make mandated cost cuts at the paper.
Broad and Burkle have long said they would be interested in returning the Times to local ownership. A third billionaire, entertainment mogul David Geffen, is known to be interested in buying the Times. A call to Geffen's office Wednesday was not immediately returned.
Tribune Co. spokesman Gary Weitman declined to comment on the bid.
Tribune tried selling the company after being pressured by discontented shareholders and experiencing plunging circulation and a decrease in advertising revenue at its 11 newspapers.
When bids for the mammoth media company came in far lower than expected, Tribune told prospective bidders that individual pieces were available for sale.
Broad, Burkle and Geffen were expected to submit bids for the newspaper. The joint bid for the entire company came as a surprise.
Wall Street has had difficulty gauging the value of Tribune Co. as a whole, in part because of all the uncertainties surrounding its media assets during a turbulent time for the industry.
Analyst Edward Atorino of the Benchmark Co. said Wednesday he thinks the company could fetch about $40 per share, or roughly 25 percent above where it was trading Wednesday. Including its more than $5 billion in debt, that would mean a price of about $15 billion.
"It's certainly worth that, but whether they get it is something else," he said. "This is going to be a long endgame. We'll see how it plays out."
Earlier this year, McClatchy Co. paid $4 billion in cash and stock for Knight Ridder Inc., the newspaper publisher that, like Tribune, ran into trouble with investors over a slumping stock price.
Returning the Times to local ownership won't necessarily secure jobs or lead to increased investment.
Wednesday, the Philadelphia Inquirer replaced its editor as the private group that bought the paper from McClatchy in June said falling circulation and ad revenue would mean deep newsroom cuts.
Philadelphia Media Holdings initially said it wanted to invest in the paper to ensure its continued growth. But last month, the group said it needed to cut and renegotiate union contracts to meet bank obligations.
Tribune's holdings include 11 daily newspapers, 25 TV stations, the Chicago Cubs baseball team, and Internet ventures as well as sizable stakes in the Food Network and the online classified advertising venture CareerBuilder.
Besides the Times and the Chicago Tribune, the company owns Newsday in New York, The Baltimore Sun, South Florida Sun-Sentinel, Orlando Sentinel and The Hartford Courant.
(© 2006 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)
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