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I work for Tribune. Carlyle Group is a partner with the Chandler family in one of the potential buyouts, but they're not even the most favored buy out to begin with -- that would be a pair of billionaires out on the West Coast. On the other hand NewsCorp is also in the mix.
Here:
(Reuters, 1/25/07)
NEW YORK - Tribune Co. is not enthusiastic about three proposals bidding on some or all of the company's assets, and has gone back to firms that did due diligence but did not bid to see if they are willing to make an offer, The Wall Street Journal reported on Thursday.
One of the groups the newspaper publisher and broadcaster approached again was a consortium including private-equity firm Madison Dearborn Partners, Providence Equity Partners Inc., and Apollo Advisors LP, the Journal said, citing people familiar with the matter.
The group is still not interested in bidding, the Journal said, citing sources.
Of the three offers it received, Tribune appears to slightly favor one from billionaire investors Eli Broad and Ronald Burkle, and is expected to ask for better terms, the Journal said.
Burkle and Broad were exploring ways to tweak their proposal to make it more attractive to the company, a person familiar with the situation told the Journal.
The board's special committee overseeing the auction is scheduled to meet again this weekend, the paper added.
A Tribune spokesman declined to comment.
Representatives of Broad and Burkle and officials at the three private-equity firms were not immediately available for comment.
Talks signal distaste by Chandlers for Tribune's newspaper business
(By Martin Peers and Sarah Ellison, The Wall Street Journal, 1/24/07)
The significance of News Corp.'s backing of the Chandler family's bid for Tribune Co. isn't so much what it means for the media giant as what it says about the Chandlers' distaste for the newspaper business. Having News Corp.'s backing -- and that of other investors who would help finance the offer - would allow the Chandlers to immediately cash out of part of their Tribune stake in the course of buying the company's newspapers.
That was made clear by the Chandlers last week in a government filing outlining their offer, a revelation that drew little attention at the time. It explains why the Chandlers, which sold the Los Angeles Times to Tribune in 2000 and have reportedly no desire to run a newspaper again, were willing to make the offer in the first place.
But their desire to use the bid as a way of quietly selling down their 20% stake probably won't help the family win support for their offer from Tribune's board. Directors are already aware that it was the Chandlers' public complaints about the company's strategy and low stock price that sparked the auction in the first place. What's more, the Chandlers' final bid was made at a price well below the value they put on the company last summer.
The Chandlers' offer is competing with a bid for Tribune's TV stations from the Carlyle Group and a proposal from L.A. billionaires Ron Burkle and Eli Broad for a recapitalization, in which Tribune would borrow heavily and pay shareholders a big dividend. Tribune reviewed the bids last weekend and is continuing to consider its options, which include doing something on its own like paying a big dividend funded by debt.
The board is reluctant to do anything that treats the Chandlers differently from other shareholders. As a result, the Chandlers' prospects of succeeding with its bid don't look good.
Here's how the Chandler offer breaks down, according to the outline of its offer filed with the government last week. The family is bidding $4.7 billion for Tribune's newspapers, which include the L.A. Times and Chicago Tribune, and proposes a spin-off of the company's TV stations. While the $1.4 billion value of the Chandlers' 20% stake in Tribune is more than enough to supply all the equity financing for the offer, the Chandlers propose to put less than half that stake into financing the bid. They propose to raise $645.9 million in equity from outside investors, giving them 51% of the bidding company to the outsiders' 49%. That money is effectively going to help the Chandlers liquidate more than half their Tribune stake. The family will put all its Tribune shares into the bidding company, and in addition to the 51% they'll get either cash or "notes" - a form of a loan - back.
The outside investors are likely to include private-equity firms Evercore Partners and Centerbridge Partners as well as strategic investors such as News Corp. - as reported by The Wall Street Journal last Friday. The Chandlers have reached out to a number of other potential investors in addition to these names.
News Corp.'s involvement hasn't been finalized. The media company could contribute up to $300 million, according to a person familiar with the situation. That implies a stake of as much as 22% in the newspaper concern that results from a Chandler purchase. If the bid was successful, News Corp. would use the stake to negotiate merging back-office functions of Tribune's Long Island newspaper Newsday with News Corp.'s New York Post. Such a deal would help News Corp. reduce the Post's losses, which run in the tens of millions of dollars a year.
Whatever happens, News Corp. isn't likely to buy Newsday any time soon. The company doesn't have permanent approval for what it already owns in New York - the Post and two TV stations. (Cross-ownership rules limit companies from owning TV stations and newspapers in the one market. The rules' future is uncertain, although News Corp. and some other companies have temporary waivers.) And any Chandler-controlled newspaper company could face tax hurdles if it wanted to sell off individual newspapers, such as Newsday.
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