The unifying reason cited by all the potential buyers boils down to this: the newspaper industry is in a continued decline, a bottom for which is too hard to call, Faber said. Paying a sensible multiple to Tribune's newspaper and broadcasting businesses produces a stock price below that currently quoted in the stock market, he said.
Tribune may still receive some sort of offer: Ron Burkle and Eli Broad may try to cobble together some kind of bid, Faber said, though there's doubt as to whether such an offer will be a fully-financed and buttoned-down offer at a specific price. The Chandler Trust could also try to throw some sort of offer Tribune's way, he said.
But, according to private equity sources who have been mulling an offer for some time, it is simply not worth pursuing based on Tribune's current stock price, Faber said.
It's not only the sagging and hard-to-predict fortunes of the newspaper business. Unlike, for example, Clear Channel, which garnered strong private-equity interest and has a $2 billion tax- loss carry forward, Tribune has no tax attributes that would advantage sales of its assets.
In fact, it's quite the opposite, Faber said. The tax implications from any sales would be too great to justify them--what you buy is what you keep, he said.
A buyer such as David Geffen, for example, might want Tribune's Los Angeles Times newspaper, but the only way to get it is to bid for the entire company, something Geffen is not going to do.
Financing a deal to buy Tribune has not been a problem. But financing alone doesn't seem enough to motivate buyers.
"The question for Tribune and its board may soon be what to do after its auction fails," Faber said.