The WSJ reports tonight that at least two bid proposals for Tribune Co. are expected - one from Eli Broad and Ron Burkle and the other from the Chandler family. But they're weird offers. Broad and Burkle are proposing not an outright purchase but a recapitalization in which they get equity (amount not known). Under the Chandler plan, the family and private-equity partners would buy the papers - and hold a 51 percent stake - while Tribune would spin off the TV operations. From the WSJ:
People familiar with the Chandlers' thinking said the family has no interest in holding on to newspapers long term. Their purchase would be part of an effort to gain control of the newspapers in order to sell them off individually, said a person familiar with the proposal. How the Chandlers propose to deal with tax issues that accompany such a breakup isn't clear. Those tax issues have been one of the reasons stopping Tribune from considering selling individual newspapers.
The family may be the only group to show up with a bid for Tribune. Many of the players who initially expressed interest have indicated they wouldn't bid for the company at the current price. Tribune's management told bidders not to submit offers that valued the company below its current market price, according to several prospective bidders.
There's no telling whether the Tribune board would be interested in either of these deals. The Chandler proposal, according to the Journal, would not offer much of a premium in the stock price - and it's Tribune's depressed stock that caused this whole thing to unravel in the first place. Other options include Tribune itself spinning off the TV stations or borrowing money to buy back shares. Earlier today, the Chicago Tribune reported that a consortium of Madison Dearborn Partners, Apollo Management and Providence Equity Partners could not agree on valuation and thus did not submit a firm bid. A source told the paper that the group would still like to bid on Tribune, but that the offer would be below the company's share price. So what does all this mean for the future of the LAT? Most likely, more uncertainty. None of these plans suggests a quick resolution to the Tribune problems. The Tribune board is expected to meet over the weekend to go over the proposals.