Tribune Co.'s biggest shareholder offered to buy the Chicago-based Tribune Co. Thursday morning and as part of the deal proposed spinning off the company's 23 television stations into a separate company. The offer proposed by the Chandler family, the family that once controlled the Los Angeles Times before it was acquired by Tribune in 2000, would be worth $7.6 billion.
Tribune Co. had not commented but the bid from the Chandler family has its ironies: Over a year ago, the Chandlers began criticizing the Tribune Co. management and financial performance, arguing the company's assets were being mismanaged. It was their criticism that eventually caused Tribune to announce it was exploring the sale of its TV and newspaper assets. The deadline for bids was Wednesday.
Tribune Co. owns some blue-ribbon stations‑WPIX New York, KTLA Los Angeles and flagship WGN Chicago. But all of its stations except one are weaker CW, MyNetworkTV or Fox affiliates."Those big market stations do have value. They are all VHF channels and a strong presence in the nation's largest cities," says Jim Goss, media and entertainment analyst for Barrington Research, based in Chicago. "But everything else they own, that's a different story."
The Chandlers were offering $19.30 per share in cash. When it spins off the stations into a separate Tribune Broadcasting, the combined entities would be worth $31.70 per share, a 4.5 premium over Tribune's closing price Wednesday. The Chandler family would own 51% of the company after the deal closed, if it goes forward.
Reportedly, Tribune Co. also received a bid from Los Angeles billionaires Ron Burkle and Eli Broad, and a private equity group, according to the Associated Press. The Burkle-Broad transaction wouldn't be a buyout but a recapitalization in which the men would offer $27 a share in cash dividend and $500 million in cash for a 34% stake in the company. Mainly the two men want control of the Los Angeles Times, which has been in tumult over declining circulation, layoffs and management shakeups.
The original deal by Tribune Co. to acquire the Times Mirror Co. was worth $8 billion. It included the Times, Long Island's Newsday, The Baltimore Sun and The Hartford Courant.