Two Los Angeles billionaires could launch a counterbid for Tribune after the publisher and broadcaster spurned their earlier offer in favor of a rival bid from Chicago real estate entrepreneur Sam Zell, a source familiar with the matter said on Tuesday.
Philanthropist Eli Broad and supermarket investor Ron Burkle are meeting with their advisers and "continuing to study Tribune opportunities," the source said.
Representatives for Tribune, Broad and Burkle declined to comment.
Tribune said on Monday it would go private in an $8.2 billion deal proposed by Zell. The company, which owns the Los Angeles Times and the Chicago Tribune, also plans to sell the Chicago Cubs and its stake in Comcast SportsNet Chicago.
Zell's bid values Tribune at $34 per share. He plans to pay $315 million in exchange for an option to buy 40% of the company. The deal would be structured as an employee stock ownership plan, with Tribune taking on $8.4 billion in debt.
The deal includes a $25 million breakup fee, which is low enough that it leaves the door open for potential rival bids. Tribune has the right to consider counteroffers before shareholders vote on the Zell deal.
The earlier Broad and Burkle bid was for $34 a share and was also structured as an employee stock ownership plan. The two planned collectively to invest $500 million as part of the offer.
Tribune has spent the past six months entertaining offers for the company after its largest shareholder complained of its lagging stock price.
The company spurned earlier bids after they failed to offer what management considered a decent price.
Tribune, like other newspaper publishers, has been coping with a downturn in paid circulation and advertising as people drop newspaper subscriptions in favor of getting more news and entertainment from the Internet.