LA Billionaires Compete with Chandler Family for Tribune Co.

Billionaires Eli Broad and Ronald W. Burkle made a bid of $500 million to help the Tribune Company refinance, while making the two the company’s largest shareholder.

The bid came on the last day before the bidding deadline. The Chandler family also put forth a proposal, one that would put the family - along with an unnamed minority partner - in control of the company’s newspapers, writes the Los Angeles Times. The family would then seek to spin off Tribune Co.’s 23 television stations as a separate entity.

Broad and Burkle, on the other hand, would leave the company intact, relying on heavy borrowing to take a roughly one-third interest in the company. The billionaire deal effectively values the company at $34 a share. Tribune could take on $11 billion of debt on its own, if it wanted to offer a similar dividend, The New York Times points out.

Burkle and Broad are two Los Angeles businessmen who have expressed interest in purchasing the Los Angeles Times, one of Tribune Company’s assets.

Tribune Co. put itself on the block last fall, originally hoping to sell in its entirety but eventually suggesting that it might sell off assets. The sale of individual assets, however, would mean hefty tax penalties, and for this round of bidding it was accepting offers only for the company as a whole.
Edward Atorino, a media analyst with the Benchmark Company, a financial research company, has called the auction “an ill-fated process,” saying it got started off on the wrong foot and never got righted.

The Chandler family, which owns 20 percent of the company, has sent ambivalent signals about whether it wants to regain the papers, which it sold to Tribune in 2000.

The apparent lack of interest in Tribune as a whole does not necessarily bode ill for the newspaper industry as a whole, according to one newspaper executive, who pointed out that it merely means that nobody wants “a diversified collection of communication assets worth $13 billion.”