Sam Zell, a Chicago real estate magnate who made a fortune by turning around distressed properties, has emerged as a strong contender to buy the company that owns the Los Angeles Times, KTLA-TV Channel 5 and the Chicago Cubs baseball team, according to people familiar with ongoing negotiations.
Zell's bid for Tribune Co. is getting serious consideration because it could buy out the disgruntled Chandler family of California and take the company private, said one Tribune executive who asked not to be named because details of the company's auction were supposed to remain confidential. That scenario is attractive to Tribune management because it would remove the company from the pressure of Wall Street investors.
The media conglomerate's financial representatives have been negotiating with Zell in an effort to drive up the value of his offer, said the Tribune executive and a businessman who has spoken to Zell.
At a real estate industry event last week, the 65-year-old real estate tycoon called his bid for the company something of a longshot. Neither he nor Tribune has given details of the plan. But the Tribune executive said Tuesday that the proposal "appears to have real legs."
Zell has made a fortune -- estimated by Forbes at $4.5 billion -- by finding value in properties where others saw trouble. He sold his Equity Office Properties Trust last month to Blackstone Group, a New York private equity firm, for $39 billion.
The motorcycle-riding investor has dubbed himself "the Grave Dancer" for his ability to pump new life into struggling enterprises. He has specialized in real estate but also invested in department stores, Chicago's Midway Airlines and Schwinn Bicycle Co.
Some Tribune insiders had initially seen Zell's play as a distraction that would merely delay their own reorganization plan. But that view seemed to be changing. A business associate who spoke to him recently said that, despite his public reserve, Zell believes he has a better than 50-50 chance of buying Tribune.
Zell acknowledged that he proposed buying the company by creating an employee stock ownership plan, which could limit his tax bill. He said the company would be owned by a partnership between him and the employee stock plan.
Zell's proposal came late in the 5-month-old auction for Tribune, which was sparked when the Chandlers complained about the company's sagging fortunes. Before Zell's bid, whose value hasn't been disclosed, Tribune had not received any bids for the entire company at a price significantly above the company's stock market value.
