Chicago real estate mogul Sam Zell has become the favored suitor for Tribune with an offer of $33 a share, person familiar with the negotiations told the Los Angeles Times.
Chicago-based Tribune, which owns 11 daily papers including the L.A. Times, has been reviewing bids that include buying out the company and spinning off divisions as it tries to satisfy restive investors.
Zell's bid for the Tribune proposes to use an employee stock ownership plan to make the offer of $33 a share, an 8.1% premium advance over the company's closing share price on Friday the Times said. A special committee of corporate directors received details of the Zell proposal Wednesday evening.
Meanwhile, the Wall Street Journal reports that erstwhile bidders Ron Burkle and Eli Broad are raising objections that Tribune didn’t give them fair treatment in the bidding process.
The two California businessmen on Saturday sent a letter to Tribune’s board saying they want to see details of the employee stock-ownership plan that would be created in a Zell deal. They complain that the company favored Mr. Zell by giving him detailed information necessary for an ESOP structure. They note that if they had that information they may be able to make a better offer.
Broad and Burkle earlier made an offer for Tribune that proposed borrowing a large amount of money and paying out a dividend of $27 to shareholders, according to the Wall Street Journal. Their deal involved a $500 million equity contribution. The two men see their proposal as similar to Zell’s but as offering more equity.
Many details still remain to be ironed out and it could be that Tribune may not be able to meet its self-imposed deadline to conclude deliberations by the end of the month. It's possible that Chicago-based Tribune will opt, instead, to reorganize itself and pay shareholders a large dividend.