A Lehman Brothers analyst said Tuesday that anything short of a high price tag in bids for media conglomerate Tribune Co. would not bode well for the company or the newspaper sector overall.
Tribune said in September it was willing to sell all or part of its assets following pressure from some of its largest shareholders, including the Chandler family, who were disappointed with the company’s lagging stock price and slumping fortunes.
Tribune has been tightlipped about how many offers it has received and for how much. All bids are reportedly due Wednesday, although the company will not confirm the deadline.
“We believe anything short of Tribune selling itself at a significant premium to the current stock price — which is highly unlikely in our opinion — will serve as a negative catalyst,” for the newspaper industry and the company, Lehman Brothers’ Craig A. Huber, wrote in a client note.
The analyst pointed to McClatchy Co.’s December sale of its flagship Star Tribune to the private equity firm Avista Capital Partners for $530 million, a sharp drop from the $1.2 billion it paid to acquire the newspaper just eight years ago.
Huber added that he believes it is unlikely that Tribune will be sold at all.
Shares of Tribune dropped 11 cents to $30.49 in morning trading on the New York Stock Exchange.