The company, which owns the Chicago Tribune, Los Angeles Times and the Chicago Cubs, as well as TV stations, has set a March 31 deadline for the auction to wrap up. Until recently, it looked as though the deadline would pass without any satisfactory bids submitted to the Tribune's board of directors. It remains unclear what will happen if the deadline passes without a deal in place. The most likely result would be an expensive re-capitalization of the company proposed by the board itself.
Previously, the company rejected bids from two California billionaires, Ron Burkle and Eli Broad--whose interest focused on the Los Angeles Times, which has suffered declining circulation and newsroom cutbacks under Tribune's management. Another bid from the Carlyle Group concerned only the company's TV stations. The company's board of directors has stated that it wishes to keep its various holdings intact.
That vision is one of the biggest factors in favor of Zell's offer. His proposal would take the company private by creating an employee stock ownership plan (ESOP), shielding the company from taxes without selling off any of its components or stakes in other valuable properties, including CareerBuilder Inc., an online network for newspaper classified ads.
Still, the board was rumored to reject his first offer tendered several weeks ago. Zell raised his offer and altered the ratio of debt to equity to make it less risky for the company's employees. His current bid of $33 a share represents a 6.5% premium over the current price.