U.S. News

Zell has $13 Billion Proposal for Tribune: Barron's


Chicago real estate magnate Sam Zell wants to take newspaper publisher and broadcaster Tribune private in a transaction valued at about $13 billion, according to financial newspaper Barron's.

Citing a person familiar with the ongoing auction, Barron's reported in its latest edition that Zell would personally put in as much as $300 million toward his proposal and has commitments from lenders for all the debt required.

Tribune was not immediately available for comment. A spokesman for Zell declined to comment.

Crain's Chicago Business reported on March 1 that Zell has publicly acknowledged for the first time that he may make a bid to buy Tribune.

Without providing details, Zell, speaking at a real estate industry event, confirmed that his plan involved creating an employee stock ownership plan (ESOP) and that the ownership would be "a partnership between myself and the ESOP," Crain's reported.

Zell's plan would hand majority control of the company to the ESOP in return for the company being able to use the tax deductions generation by the ESOP to sweeten the share price that Tribune could pay existing shareholders, according to Barron's.

Barron's reported that Zell wants to become chairman of the surviving entity.

Chicago-based Tribune is reviewing bids that include buying out the company and spinning off divisions as it tries to satisfy restive investors. It is expected to decide by the end of the month.

Tribune has been mulling a management-led plan to restructure after bids from billionaires Eli Broad and Ron Burkle and entertainment mogul David Geffen failed to impress a special committee of Tribune's board evaluating its options.

Tribune put itself up for sale after its largest shareholder, the Chandler Trust, proposed the company take itself private for about $7.6 billion, or $31.70 a share. The stock closed at $30.55 on Friday.

According to a report last week in the Los Angeles Times, a Tribune paper, Zell is seen as a strong contender to buy the media company.

Tribune owns daily papers in such cities as New York, Chicago and Los Angeles, as well as about two dozen television stations and the Chicago Cubs professional baseball team.

On Feb. 7, private equity firm Blackstone Group won a three-month bidding war to acquire top U.S. office landlord Equity Office Properties Trust, founded by Zell, for about $23 billion.