Tribune Co., owner of the Los Angeles Times and Chicago Cubs, will probably accept real estate billionaire Sam Zell's $8 billion takeover offer by the end of the week, according to people familiar with the matter.
An agreement is likely by Tribune's self-imposed deadline of March 31, said the people, who declined to be named because no decision has been made. Zell's offer of $33 a share is 6.8 percent above yesterday's close.
Zell's offer was competing with the company's plan to reorganize, as well as less-attractive bids from the company's largest shareholder, the Chandler family, and California billionaires Ron Burkle and Eli Broad. The auction dragged on for six months amid waning interest from buyers and an 8.4 percent drop in the stock.
"Shareholders have to be frustrated that this has gone on while the share price has declined,'' said James Peters, an equity analyst at Standard & Poor's in New York. He rates the stock "hold'' and doesn't own it. "The price being discussed reflects that fact that the company is in a declining revenue environment.''That "declining revenue environment" comment refers to the fact that Tribune reported this week that "newspaper advertising fell 5.1 percent in February to $233 million, led by a 13 percent drop in classifieds."
Zell will apparently not break up the company -- one of the other options being considered.Update: This one isn't over yet. Now some LA billionaires have submitted last-minute bids.
The Burkle and Broad bid includes $500 million in cash and would use an employee stock ownership plan to aid the recapitalization, the person said. It is believed that Zell was proposing to invest $300 million.
But with little else known about the offers, it was unclear whether Tribune's board, which met Thursday, would consider the latest bid or even extend its deadline.
The deadline was supposed to be 3/31, but that's past, with no word.
Updated update: Looks like Zell won. Anybody wanna buy the Cubs?