Directors of Tribune Co. met Monday in Chicago without announcing a decision about the sale of the company's suburban newspaper in Van Nuys, the Daily News.
It was unclear why the board, which was expected to pick a buyer at the meeting, failed to announce a choice. One source familiar with the negotiations for the 150,403-circulation paper speculated that the board may have asked the company to continue seeking a buyer because it is dissatisfied with the current bids.
The source, who asked to remain anonymous, said he understood that the highest bid was $94 million, which is substantially lower than the company was expecting.
Salomon Bros., the investment banker handling the sale for Tribune Co., had told suitors that it hoped to get $150 million.
Number of Bidders Unclear
Tribune Co. spokesman Joseph A. Hays confirmed that directors had met Monday but refused any further comment.
Also unclear is how many bidders remain for the Daily News. Two executives involved in the negotiations said that at least two suitors who toured the paper have dropped out.
Those are Forstmann, Little & Co., a New York investment firm that specializes in organizing buy-outs, and Ingersoll Publications, a newspaper company based in Connecticut.
Executives from Ingersoll familiar with the talks were unavailable for comment. Officials at Forstmann, Little declined to comment.
Bidders still remaining, sources said, are Chronicle Publishing, a family-owned company that publishes the San Francisco Chronicle; A. H. Belo Corp., publisher of the Dallas Morning News, and a group of Daily News executives.
Leveraged Buy-Out Bid
A representative for Jack Kent Cooke, owner of the Washington Redskins, also toured the Daily News plant, although it is unknown whether Cooke submitted a final bid. Cooke officials did not return phone calls Monday.
The Daily News executive group formally bid to buy the paper last week using a leveraged buy-out, in which a suitor buys a property with borrowed money and then repays the debt either by selling off corporate assets or from the company's operating revenue.
A source familiar with the Daily News said the executive group plans to borrow $75 million from Bank of America and get additional funds from other sources. The group then plans to sell the paper in five years, at which time each of the executives would receive 1% of the sale price.
The executive group includes Daily News Editor Timothy M. Kelly, Vice President Thomas E. Griffiths, Management Information Systems Director Gerald W. Rusca and Production Director Eugene Moni Jr.
Members of the group have refused to comment on the terms of their offer.
Purchase of Channel 5
Leo Hindrey, chief officer for planning and finance at Chronicle Publishing, declined to comment on any bidding for the Daily News.
Belo President Robert W. Decherd has similarly declined comment.
Tribune is selling the Daily News as a condition of its acquisition of Los Angeles television station KTLA Channel 5.
Federal regulations prohibit one individual or company from owning a newspaper and television station in the same market.