Business Week's Inside Wall Street column says some investment pros are betting that Tribune Co. will be a takeover target.
Like most other newspaper stocks, Tribune has been beaten to a pulp on poor earnings caused by a slump in ads and readership. Its stock is down 25% in the past year, hitting 27 on Apr. 5. It now languishes at 27.87. Of 19 analysts who follow the stock, 16 are down on it. But Lawrence Haverty of Gabelli Global Multimedia Trust (GGT ), which owns shares, sees Tribune as takeover bait. It is "extremely cheap" based on its assets, including the Los Angeles Times, New York Newsday, Chicago Tribune, 26 TV stations, a radio station, and the Chicago Cubs. "With its assets valued at wastebasket prices, Tribune will attract a buyer," says Haverty.
Haverty expects its "unhappy shareholders to band together and seek changes -- as they did at Knight Ridder (KRI )," which has agreed to be taken over by McClatchy Newspapers (MNI ). The Robert R. McCormick Tribune Foundation owns 14% of the company and Chandler Trust 12%....James Peters of Standard & Poor's sees Tribune continuing to reduce costs and move resources to growth areas, such as the Net. It's encouraging, he says, that Tribune plans to derive 12% of its ad publishing revenues online in three years, up from 6% now. Peters rates Tribune a "buy." A Tribune spokesman declined comment on buyout talk.
Also via Romenesko: The San Francisco Chronicle's James Sterngold observes the Ron Burkle dust-up with the New York Post and gossip writer Jared Paul Stern (whose constant email "tips" about Burkle to bloggers and columnists seems to be turning his press image more favorable) and says the billionaire "is engaged in the Desert Storm of publicity wars with the newspaper."