Zell’s Tribune Co. Bid: It’s Up, It’s Down, It’s Up Again

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By: E&P Staff

Chicago real estate billionaire Sam Zell’s bid for Tribune Co. — which directors of the media giant first welcomed and then dismissed, according to reports — now is finding favor again.

In an article Thursday by staff reporter Michael Oneal and media columnist Phil Rosenthal, the Chicago Tribune reports that Zell’s bid “has regained the attention” of directors in charge of Tribune’s “strategic review” of options, including outright sale of the company.

Quoting unnamed sources, the Tribune reported the board of director’s special committee met by conference call Wednesday night to review Zell’s proposal, which the paper said had been “tweaked.” Zell’s bid at first attracted attention because of its proposal to take Tribune private by way of an employee stock ownership plan (ESOP) that would have some tax advantages.

Tribune has said it will make a decision on its future by the end of the month, though it postponed a previous deadline late last year. The full board has scheduled a March 30 meeting.

Like the other reported option for the board — a management-led “self-help” plan to pay out a bid dividend financed by debt while selling off Tribune’s broadcast properties and perhaps the Chicago Cubs, and taking the rest of the company private — Zell’s plan would involve taking on considerable debt. Tribune is already significantly leveraged because, among other things, it borrowed to pay a $1 billion tax bill it continues to contest.

“They’re constantly negotiating,” the Tribune article quotes an unnamed source. “Zell’s deal fell out of favor for a brief period, but now it’s back.”

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