U.S. News

Zell Says He Is Still Talking to Tribune About a Deal

Associated Press

Billionaire investor Sam Zell said Tuesday he remains in talks with Tribune, and his proposal to acquire the media conglomerate is still on the table.

In an interview with The Associated Press, Zell said he does not believe his proposal has lost momentum or fallen out of favor with the media company, as some reports have suggested. "There are ongoing conversations," he said.

The real estate magnate, whose Equity Office Properties Trust was sold to the private equity firm Blackstone Group last month for $23 billion, said the discussions began about a month ago when Tribune approached him. He declined to discuss the status of talks.

Zell's interest in Tribune has caused some surprise on Wall Street, given the deterioration of the newspaper business and its continuing loss of circulation, advertisers and revenue as readers migrate to the Internet.

"I probably am not as pessimistic about the future of the newspaper business as others might be," he said. "I just think that newspapers are a part of our life and they're a part of our culture and a part of our society, and there will always be a place for them."

The media company has been soliciting a buyer for some or all of its assets since last year. Pressured by its long-sagging stock price and dissident shareholders, it appointed a special board committee in September to review options for its business -- including a possible sale, breakup or offers to be taken private. Its self-imposed deadline for making a decision is March 31.

Asked about reports that his plan calls for taking Tribune private for $13 billion, Zell said: "I don't know anything about the number. I think that the concept would result in it being a private company."

He confirmed that the proposal calls for "a significant ownership" via an employee stock ownership plan and that he does not intend to break up the company. "We cannot look at it from a breakup perspective," he said.

Tribune spokesman Gary Weitman, informed of Zell's remarks, said the company had no comment.

Tribune earlier this year was reviewing possibilities that included a recapitalization with a broadcast unit spinoff, led by the Chandler family shareholders whose pressure prompted the review, and a public leveraged buyout by Los Angeles billionaires Ron Burkle and Eli Broad. But both offers, made in January, have failed to produce a deal.

Zell said it is misleading to call his proposal an offer. He said he had presented Tribune with "a concept for going forward, and ... we would decide that they want to accept it, or they won't."

He said the amount he would contribute personally in a transaction with Tribune remains uncertain. "All I can say is that if I decide to go forward and they decide to go forward, then at that time we'll decide what my contribution may be," he said.