Tribune Mulls Offer from Sam Zell

Newspaper publisher and TV broadcaster The Tribune Company, on the brink of finalizing a "self-help" internal overhaul, is considering an offer from real estate developer Sam Zell. The highly leveraged deal would be structured around an employee stock ownership plan [ESOP] that would bring the company several federal tax benefits. The deal trumps two other private bids -- a $7.6 billion ($31.70 per share) offer from the Chandler family, the company's biggest shareholder; and a $34.00 per share offer from billionaires Ronald Burkle and Eli Broad -- that the company had already indicated it considered insufficient. The company has instead constructed a recapitalization plan that would spin off its broadcast outlets, retain most of its newspapers, and borrow money to enable the distribution of a large dividend. The board, which is said to continue to favor its self-help plan over Zell's offer, will reach a decision by the end of March. Zell recently sold his Equity Office Property Trust to the Blackstone Group for $39 billion in what was briefly the biggest LBO in history.

Sources: New York Times, Wall Street Journal, MarketWatch, Reuters
Commentary: WSJ: Tribune Co. Now Leaning Away From Selling Itself • Trying to Sort Out Tribune Bids After Sale Deadline Passes • Low-Balled in Its Bid to Sell, Tribune Company Ponders Its Options. Conference call transcript: Tribune Q4 2006
Stocks/ETFs to watch: Tribune Company (TRB). Competitors: Dow Jones & Co. Inc. (DJ), Gannett Co., Inc. (GCI), The Washington Post Co. (WPO), The McClatchy Company (MNI), The New York Times Co. (NYT)

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