Sources close to the negotiations say the Tribune Co. is likely to accept Sam Zell's offer of an $8 billion buyout, according to Bloomberg. Zell's $33 per share offer is 6% above yesterday's close. If successful, Zell's offer will have beaten bids by the Chandler family (the company's largest shareholder [20%]) and L.A. billionaires Ron Burkle and Eli Broad. It will also mark the end of the Tribune's attempts to construct a "self-help" reorganization plan that would spin off its TV stations and pay shareholders a one-time dividend. The Tribune has been on the block for six months, during which time the stock has lost 8.4% of its value as revenue has declined. Zell has said he wants to keep the company's TV stations and newspapers intact. "My intention is not to break it up," he said on March 12. Credit-default swaps based on $10 million of the company's bonds leaped $35,000 to $194,000 yesterday, suggesting the market expects the Tribune to accept Zell's offer and thereby take on substantial new debt.
Commentary: Will a Buyout Save The Tribune Company? • Zell's Offer for Tribune Gaining Favor • A Sam Zell Takeover May Be Tribune's Best Bet - Barron's
Stocks/ETFs to watch: The Tribune Company (TRB). Competitors: Gannett Co. (NYSE:GCI), The New York Times Co. (NYSE:NYT), The Washington Post Co. (WPO), The McClatchy Company (NYSE:MNI)
Conference call transcripts: Q4 2006
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