Chandlers may bid for Tribune as last resort
The Chandler family fired its first shot last summer. The onetime owner of the Los Angeles Times lashed out at Tribune Co.'s plan to take on debt to buy back $2 billion of its stock and blamed the Chicago company's "disastrous" decision-making for its sinking stock price.
Those protests forced Tribune into play. But seven months later, the family that is Tribune's largest shareholder is still waiting for satisfaction. And observers say it's increasingly unlikely the Chandlers will get it from an auction set to end this week.
Tribune probably will attract few, if any, bids for the entire company by Wednesday's deadline, and any offers it does receive are expected to be close to the current share price, according to several people who have been observing or participating in the process.
Tribune shares closed Friday at $30.60 -- barely above their level when the Chandlers launched their protests in June.
"You may not have an auction when all is said and done," said a professional associated with one private equity firm that had been eyeing Tribune who asked not to be named because the auction is confidential.
Merrill Lynch analyst Lauren Rich Fine said in a report to clients Friday that Tribune shares were trading as though investors thought there would be no sale.
"We think there is a distinct possibility of that happening," Fine wrote, "and note that even if there is a sale, a big premium is unlikely."
That could prolong the uncertainty overshadowing the company that owns The Times, KTLA-TV Channel 5, the Chicago Cubs baseball team and 10 other daily newspapers and 22 other television stations.
Others following the Tribune saga said they expected at least a few bids for the media giant -- perhaps including one from the Chandlers themselves.
A successful Chandler bid would put the family back in control of The Times after a 118-year reign that ended in 2000 when the paper and other holdings were sold to Tribune.
Those following the deal closely believe that the family would make such a bid as a fallback. Despite myriad potential pitfalls, they said the most consistent interest in a deal has been expressed by a group composed of three private equity firms -- Madison Dearborn Partners of Chicago, Apollo Management of New York and Providence Equity Partners of Rhode Island.
