With a bidding deadline for Tribune Co. set for Jan. 17, the charitable foundation that is the media company's second-largest shareholder said Thursday that it had hired Blackstone Group as an advisor on courses of action that could include selling its 12% stake or joining in a bid for the parent of the Los Angeles Times.
The McCormick Tribune Foundation, which holds about 28 million Tribune shares, also said it had signed a nondisclosure agreement with the company, enabling it and Blackstone to look at nonpublic financial information about Tribune. Several private-equity firms previously signed such agreements as a prelude to making bids.
Among the possible actions the foundation outlined in a regulatory filing Thursday were "making additional purchases of [Tribune] common stock or disposing of its shares."
As a public charity, the foundation is not legally barred from owning a controlling stake in Tribune, but experts said it lacked the resources to be a lead bidder for a company that would cost more than $10 billion, including the assumption of debt. Besides The Times, Tribune owns the Chicago Tribune and nine other newspapers, 23 television stations and the Chicago Cubs baseball team.
Bear Stearns analyst Alexia Quadrani said in a note Thursday that the foundation's move amounted to "a vote of no confidence" in Tribune management. But the foundation shot back a denial, saying it "continues to have complete confidence" in management.
The foundation's directors "are under a legal obligation to protect and enhance the value" of the assets -- including Tribune stock -- that fund its charitable activities, spokesman Joseph A. Hays said.
A media executive who has followed the Tribune situation closely described Blackstone's hiring as a defensive maneuver against possible low-ball bidding.
"McCormick needs to be in the position to closely and astutely judge any bids that do come in," said the executive, who declined to be named because he had been given the information confidentially.
The Chandler family of Los Angeles, Tribune's largest shareholder group, with about 20% of the stock, has had discussions with Los Angeles billionaires Eli Broad and Ron Burkle about bidding for all or part of Tribune, according to people familiar with their plans. It was the Chandlers who pushed Tribune toward the auction by publicly criticizing management last summer.
