Paper Tigers: Chandlers Bid For Tribune

Tribune gave a going-away party--and almost no one came.

After a distinctly lukewarm auction marked by the absence of other major media companies, the Chandler family offered to buy the Tribune Company for $7.55 billion yesterday. The price is lower than the Tribune Company wanted, and it's unclear whether its board of directors will bite. The Chandler offer is laced with irony. That wasn't their stated goal when the auction began--at their request.

The family, which owns about 20% of Tribune's stock, began beating the drums for a major shakeup at the company to buttress its sinking stock value in June 2006. After a bitter internecine power struggle, the Chandlers succeeded in forcing the board to put the company up for auction in October 2006, hoping to sell off peripheral properties, like its broadcast division.

Several private-equity groups expressed interest, but no major newspaper owners joined the bidding process. In the end, no attractive offers were received for the company--in whole or in part.



By December, the Chandlers' plan seemed to have backfired. In mid-December, the family suddenly adopted a different tack: recruiting private-equity investors to help them buy the whole company.

The Chandlers' stated intention is to sell the Tribune's broadcast division--which they argue is not part of the core business and a financial liability. The deal would give the Chandlers 51% ownership of the smaller company, with the remaining 49% going to two private-equity firms allied with the family.

The Chandlers' offer comes to $31.70 per share, just a 2.8% premium over the stock's trading value of $30.85 Thursday afternoon. The Tribune's board of directors has until Jan. 31 to accept or reject the Chandlers' bid. According to The Wall Street Journal, supermarket magnate Ron Burkle and real-estate investor Eli Broad joined together to submit a proposal for Tribune yesterday, although it wasn't a buyout offer, said people who were familiar with the situation.

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